ABIDJAN – Ivory Coast President Alassane Ouattara expects his West African country’s economic growth to average 10 percent per year from 2013 to 2015, substantially above current estimates, according to a text of a speech.
Ouattara said growth would be led by “a strong recovery” in investment and a reform of the cocoa sector in the world’s top grower which will provide greater revenues to farmers, according to an emailed copy of a speech delivered at the annual meeting of the African Development Bank in Tanzania.
“Growth should reach eight percent in 2012 and, on average, around 10 percent for each of the three subsequent years, putting us in the vanguard of high-growth African countries,” he said.
Long an economic motor for French-speaking West Africa, Ivory Coast descended into months of conflict last year after former President Laurent Gbagbo disputed a late 2010 election result that showed he had lost to Ouattara.
The economy contracted 4.7 percent last year as a result, but billions of dollars of donor cash are boosting hopes of a strong rebound that could help shore up peace after years of instability. The International Monetary Fund is also forecasting 8 percent economic growth for 2012.
“It is investment (that will propel growth). Agriculture will also drive growth because with the reform of the cocoa sector, farmers’ revenues will increase substantially, driving consumption and investment,” Ouattara added in comments to Reuters on the sidelines of the conference.
A Reuters poll of analysts published last month showed that Ivory Coast can look forward to extended growth this year and next if it maintains its strategy of long-term structural reforms. However, the consensus forecast in the poll was for growth to hit 7.5 percent this year before slowing to 5.8 percent in 2013.
“Typically, when a country is recovering from a political crisis or taking off from a very low base and things are going well, governments tend to set ambitious targets,” said Samir Gadio, an analyst at Standard Bank.
“It’s not inconceivable if you have the combination of structural reforms, high commodities prices, and increased foreign direct investment,” he said in reaction to Ouattara’s growth projection, but added that growth of six to seven percent was more likely.
The IMF has now said that Ivory Coast is on track to secure a fund-backed debt relief deal at the end of this month. The arrangement would see its $12.5 billion in external debt reduced by $5 billion, lowering its stock of debt to around 30 percent of GDP.
That could help spur investment, which has not rebounded in line with the rate of economic recovery, and fuel higher growth, a top IMF official told Reuters last week.
“I think everybody’s hopeful that (securing debt relief) will send the kind of signal that investors are looking for,” said Roger Nord, deputy director of the IMF’s African department.
“(That’s) namely that Ivory Coast is a country that now has a sustainable level of debt, the ability to repay, and both an economy and political system that’s robust for investment. And I think that’s what they’re looking for,” he said.