Finance

Côte d’Ivoire: a high growth in FCFA, but a drop in the GDP in dollars

Monday, 13 July 2015 19:35

According to the economic forecasts of the IMF, Côte d’Ivoire will register a growth of 7.7% in 2015 in GDP, to reach in the local currency FCFA 18,400 billion. In 2014, the growth of this economic indicator, which had reached FCFA 16,800 billion, was 7.4%

However, one aspect of the GDP which is not often noticed by the public authorities is the US dollars performance of the GDP. This is an aspect which must be taken into account by countries importing fuel and consumer goods. And, considered under this viewpoint, the economic growth will not materialise. The GDP in dollars of Côte d'Ivoire is announced at only US$ 31.7 billion, against approximately US$ 34 billion in 2014.

Even though it keeps with its dynamic trend, the Ivorian economy, just like that of the others in the Franc zone, is under the risk of not being able to limit the effects of the rise of the American dollar, according to its economic indicators. The country of president Ouattara, having recently out of a long social and political crisis, is nevertheless faring better than Cameroon its runner-up, whose growth in local currency is announced at only 5% at FCFA 16,000 billion, and only US$28 billion, declining when compared to the US$30 billion in 2014.

The interest in comparing the two countries lies in the fact that they have similar economic profiles, both being the leaders in their respective sub-regions, the UEMOA for Côte d'Ivoire and the CEMAC for Cameroon. In addition, both territories count a population of 23 million inhabitants. The Ivorian performance is even more singular when noticing that the proportion of the GDP of investments claimed by Cameroon is greater (23.4%) than that of Côte d’Ivoire (17.4%).

Some observers have sometimes shown reservations or been outwardly critical of this Ivorian performance, which lies according to them on massive debts.  Despite the country reaching its initiative on partial debt relief (PPTE), these analysts point out that a return to debt levels before PPTE could well happen, with a less sustained progress of the GDP.

There is however less flexibility for Alassane Ouattara, who inherited a divided country on its knees and who at the same time, had to build back up the unity and wealth of the country. Prime Minister Daniel Kablan Duncan facing the country’s media presented the strides forward made by his government to improve the business environment. Côte d'Ivoire can also count on the presence in its space of one of the most important financial markets in Africa which liquidity keeps on getting better.

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