Africa Economic Forum Ivory Coast

Recent Macro Economic and Financial Development

In 2022, Ivorian economic activity remained robust, despite facing challenges arising from Russia's invasion of Ukraine, global monetary tightening, and growing political instability in the West African Economic and Monetary Union (WAEMU). Despite rising import prices, rising global and domestic interest rates, and declining external demand, economic growth is forecast to fall from 7% in 2021 to 6.7% in 2022.

Growth was largely driven by sustained public investment and strong domestic consumption. Industrial and service sectors and the government's fiscal measures to control price rises also contributed to this economic performance in the first half of the year. Inflation averaged 5.2% in 2022, marking its highest level in a decade, driven by rising food, transport and energy prices. Nevertheless, the short- and medium-term economic outlook remains positive, albeit slightly below pre-COVID-19 levels. This optimism is underpinned by a strong commitment to macroeconomic stability and ongoing structural reforms in line with the National Development Plan (NDP 2021-2025).

Real GDP growth is expected to average 6.5% in 2024-25. Continued investment in network infrastructure, particularly in the digital and transport sectors, and the exploitation of recent oil discoveries, combined with prudent macroeconomic policies, should boost business confidence and boost productivity. Projects to develop value chains have the potential to improve agricultural productivity and boost manufacturing, underpinning long-term growth prospects.

Outlook and Risks

GDP is projected to grow 7.2% in 2023 and 7.0% in 2024 as the reforms and investments in the National Development Plan (NDP) 2021–2025 accelerate and production starts at the Baleine gas and oil field discovered in 2021–22. Growth could be fuelled by several sectors (energy, construction, mining, agribusiness, trade, telecommunications, and agriculture), as well as investment and consumption. Inflation is projected to fall to 3.7% in 2023 and 2.7% in 2024 due to increased local food supplies and the continued fight against the high cost of living.

The budget deficit is projected to narrow to 5.2% of GDP in 2023 and 4.1% in 2024 due to greater mobilization of domestic resources and better control of public spending. The current account deficit is projected to widen to 6.1% of GDP in 2023 and 6.0% in 2024 due to higher NDP investment. Possible headwinds include a deteriorating political climate following local elections in 2023, the ongoing effects of Russia’s invasion of Ukraine, a resurgence of the COVID-19 pandemic, and a decline in the price of agricultural raw materials.

Climate change issues and policy options

The climate finance deficit averages $2.7 billion a year over 2020–30, with limited potential for private contributions. The country has no sovereign fund, and investment funds are limited and difficult for small and medium enterprises to access. But the country can rely on its network of insurance companies and on two pension funds (Caisse Nationale de Prévoyance Sociale and Caisse Générale de Retraite des Agents de l’État). Due to resource mobilization difficulties, private climate finance remains extremely low. Resolving this problem should focus on addressing the inadequate legal framework, specifically for the carbon market, and tax incentives; the lack of awareness of existing finance; and poor national capacity and technical skills in innovative climate finance. Natural capital, worth an estimated 45% of the national economy, is a major asset that should be promoted as the country seeks to establish sustainable economic growth.

Côte d’Ivoire, the world’s leading cocoa and cashew producer, is experiencing one of the fastest sustained economic growth rates in Sub-Saharan Africa in over a decade. With real GDP growth averaging 8.2% between 2012-2019, Côte d’Ivoire successfully contained the COVID-19 pandemic and maintained a 2% rate in 2020. In 2021, the country returned to its high-growth trajectory and continues to play a central role as a regional economic hub and host country for many nationals from the Economic Community of West African States (ECOWAS) and elsewhere.