The NDP sets the course
The 2021-2025 National Development Plan will focus on a massive industrialisation effort. Objective: to drive and facilitate the emergence of a large middle class.
Building the future with 59,000 billion CFA francs. That’s $105 billion. This is the sizeable amount of investment that the government is set to mobilise in order to implement the 2021-2025 National Development Plan (NDP) adopted on 22 September 2021. This plan is designed to “achieve the economic and social transformation necessary to raise Côte d'Ivoire to the rank of upper middle-income countries by 2030”.
The NDP, which is unprecedented in its scope, is proof of great confidence in the future of Côte d'Ivoire in the current period of pandemic. The financial package to be raised is almost twice as high as that of the previous plan (2016-2020), which had raised “only” 33,000 billion CFA francs in investments. However, the country, which plans to “step up the pace towards emergence”, has come a long way. “In 2011, after a decade of crisis, our nation was on its knees and looked like it would stay that way for a long time. GDP per capita had declined to its 1961 level, with more than half the population living below the poverty line [...]. In the space of 10 years, we have erased these times of tragedy, through an unprecedented collective effort,” stressed Prime Minister Patrick Achi on 8 November 2021.
According to the United Nations, the country is now one of the 12 fastest growing economies in the world, posting an average annual real GDP growth rate of 8.3% between 2012 and 2019. The aim is to maintain this momentum and build on it. The preamble to the 2021-2025 NDP plans that “by 2030, the Ivorian economy be structurally transformed, modernised and industrialised, and that the majority of the Ivorian people be freed from extreme poverty and vulnerability”. The plan should thus lead to the emergence of “a middle class with an adequate income and benefiting from essential economic and social public services that ensure comfort and quality of life”.
The country is an avid planner and is currently engaged in its third NDP since 2012. This one will see the rate of investment soar from 23.1% of GDP in 2021 to 27.1% by 2025. An incomparable effort is expected from the private sector, which is expected to provide 74% of NDP investments (43,647 billion CFA francs). This means it has to mobilise around 9,000 billion CFA francs a year, while the public sector will invest 26% of GNP ( 15,353 billion CFA francs). To do this, the government intends going to the financial markets and increasing the tax burden from 12.2% to 13.3% of GDP, far from the West African Economic and Monetary Union (WAEMU) standard of 20%.
The plan provides for structural reforms of the State (digitalization of public administration, etc.), but also for an unprecedented modernisation of the whole of society. The NDP identifies entire sectors of the economy (agriculture, energy, industry, transport, entrepreneurship, digital technology, sustainable cities, regional integration, etc.) and the social sector (youth and women's employment, education, higher education, housing, access to water and electricity, sanitation, justice, social cohesion, human rights, etc.) that will benefit from the billions invested. This boost is expected to increase the average annual growth rate to 7.65% during the NDP, compared with 5.9% between 2016 and 2020.
As for the social aspect, per capita income is expected to rise from $1,736 in 2020 to $2,240 by 2025, and then to $3,472 by 2030. By the end of the plan, the economy is projected to have created 5 million jobs, and the poverty rate is forecast to fall to 30% by 2025 compared to 39.4% in 2018.
Rice self-sufficiency by 2025
The success of the NDP hinges on key economic sectors. Agriculture (4%), industry (11%), mining (10%), hydrocarbons (10%) and transport (10%) account for 45% of planned investments. Agriculture, which employs over 5 million people, is a major cornerstone of the country's economy. Not only is Côte d'Ivoire the world's leading producer of cocoa and cashew nuts, and ranking fifth for palm oil and natural rubber, it is also Africa's largest producer of bananas and third largest producer of cotton. The NDP's ambition is “to guarantee the competitiveness and sustainability of agriculture in order to ensure food security, while creating equitably shared wealth”. This vision is based on three pillars: improving productivity by 100% over five years to increase the competitiveness of products; increasing local processing, with the rise of a domestic industry; and ensuring the integration of agribusiness into global distribution and marketing channels.
Over and above increasing agricultural production by an average of 7.5% per year and improving the yields of the main food crops (cassava, maize, plantain, yams, etc.), the decisive challenge of the plan is to build a diversified local processing industry that generates added value, based on “cocoa, coffee, cashew nuts, cotton, horticulture (mangoes, pineapples, etc.), rubber and palm oil”. The country plans on reaching rice self-sufficiency by 2025, with the local grain supplying 95% of the Ivorian market. “We need a strong value chain that can be attractive for processing agricultural products and creating shared wealth,” stated Akinwumi Adesina, president of the African Development Bank (AfDB), which has pledged its support for the plan.
Another key activity is a manufacturing industry “capable of accelerating Côte d’Ivoire’s structural transformation process”, as stated in the NDP. A state-private sector Industrial Investment and Development Fund (FIDI) will be established, with a five-year funding package of 1,000 billion CFA francs. The priority activities identified include “cosmetics, rubber, textiles and construction materials” as well as “pharmaceutical, electronic and other industries” and “growth niches” such as the digital economy, tourism and hotel industry, and the arts and cultural industries.
Backing high-performance sectors
The plan focuses on sectors with a competitive advantage, such as cocoa butter-based cosmetics, “in skin care and hair products", of which 85% is exported to the Economic Community of West African States (ECOWAS). These products could also be sold to the African diaspora in the US and Europe, although “research and development as well as better promotion and branding are needed for Ivorian cosmetics to compete with established global brands”.
In the textile sector, “Côte d'Ivoire is one of only two African countries producing wax-printed fabric”, which is closely associated with African identity. However, it faces strong competition from Chinese products. “The industry can increase its competitiveness by building brand recognition, improving quality and expanding the range of designs to counteract Chinese counterfeits,” states the NDP. Lastly, in the extraction of mineral resources (gold, manganese, nickel, and bauxite), the country intends to strengthen its efforts in exploration and operation, as well as in processing. It also wants to set itself up as a regional oil hub. An unexpected windfall was a “major oil and gas discovery” announced in September last year. It could bring in between $106.5 and $142 billion for oil and up to $25 billion for gas, on condition that the profitability of the deposits is proven.
For the time being, the government is actively campaigning to attract the private sector. On 10 November 2021, the President of the General Confederation of Côte d'Ivoire Companies (CGECI), Jean-Marie Ackah, confirmed “the readiness of the private sector to fully play its part in the achievement of its ambitions in terms of development and progress”, stating that “it is a case of assigning a strategic dimension to the public-private partnership as the driving force behind the much hoped-for structural and cultural transformations”.
On the international front, the first Business and Investment Forum bringing together Côte d'Ivoire and North America, which took place in mid-November 2021 in Abidjan, recorded North American investment intentions to the tune of $19 billion. Côte d’Ivoire has also sent a delegation to Expo 2020 Dubai, which runs until 31 March 2022, where it aims to raise around US$2 billion in investment intentions. Lastly, a donors' round table in the first quarter of 2022 will be the high point of the government's strategy to get potential international investors on board for the implementation of the 2021-2025 NDP.
This boost is expected to increase the average annual growth rate to 7.65%
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