AFRICANGLOBE – Ivory Coast’s economy will grow by 7.9 percent this year and by an average of 7.6 percent in 2016 and 2017, the International Monetary Fund (IMF) said in a new report. The country, once torn by civil war, has been showing impressive economic recovery since the end of the crisis in 2011.
Increase in private sector investment under President Alassane Ouattara has largely spurred this growth. However, the outcome of the presidential election, slated for October, will play a key role in the economic prospects for next year. IMF forecasts were below the target the government set for itself this year — 9.4 percent — which it expects to run into double-digits in 2016. “While the staff recognises that a post-election end to the wait-and-see attitude of some private investors could push growth rates above its estimate in 2016, the mission felt that this factor is too uncertain to be incorporated in the baseline scenario,” the report said.
Frontier market investors, who are excited by Ivory Coast’s impressive growth in recent years, are believed to be keen to see Ouattara re-elected. The former deputy head of the IMF had embarked on large-scale infrastructure projects, previously stalled during years of political instability.
The French-speaking nation has also invested heavily in electricity generation, with a new output target set as 4,000 megawatts, from the current 1,600. That’ll be almost double the current output of Nigeria, its west African neighbour and the continent’s largest economy. Already, the country is exporting its excess power to neighbours like Ghana.
Investments into Ivory Coast is also growing rapidly, particularly into its resource sectors. Recently, Olam, a Singaporean firm with agricultural interests across Africa invested $75 million in the country’s cocoa industry, which accounts for 22 percent of the country’s GDP. The first chocolate making factory was also launched in the West African nation this year.
Overall, Ivory Coast’s macroeconomic outlook is positive but risks remain. Poor weather could affect agricultural output and power production while a continuation of recently discovered extra-budgetary spending may affect the economy and scare investors.