CÔTE D'IVOIRE

Côte d‘Ivoire is an anchor of political and economic stability in West Africa. Whereas there were three military coups in the neighbouring countries of Guinea, Mali and Burkina Faso in an eight-month period beginning in May 2021, the situation in Côte d’Ivoire remained calm. The commodity-rich hub on the Gulf of Guinea has recorded consistently strong economic growth since 2012, regularly exceeding 6 percent, well above the population growth rate, which is also high at about 2.5 percent per annum. Its population grew from 16.5 million in 2000, to 26 million 20 years later. At the same time, GDP per capita rose from $920 to $2,271. Even in the pandemic year of 2020, when the African continent as a whole experienced a recession for the first time in 25 years, Ivorian economic output still grew by 2 percent. As a result, the country has a growing middle class providing a solid social base, even if there are still many challenges to be overcome. Even before the Covid-19 epidemic, for example, more than 30 percent of those in the 15-24 age bracket lacked both school/professional education and a job. For many Ivorians, the informal sector provides the principal opportunity to secure their existence.

As the largest economy in the West African Economic and Monetary Union (WAEMU; French acronym UEMOA) and a gateway to francophone West Africa, Côte d’Ivoire offers access to a region of more than 110 million people. Even if Côte d’Ivoire, like many other African nations, urgently needs to diversify its economy further to make it more resilient, the country enjoys a relatively broad base compared to others in the region. Côte d’Ivoire therefore has a significant role to play among the total of 15 member states of the Economic Community of West African States (ECOWAS). It has a well developed service sector and a growing manufacturing industry. The investment climate is also considered good.

Côte d’Ivoire stands out on account of its government’s pro-globalisation agenda and a culture of innovation that understands that technical changes are a necessary condition. Worth noting are the country’s increased efforts to expand its economic relations with Germany, and this is also reflected in the Reform Partnership agreed upon in 2017. One source of support for the German business community is the Kreditanstalt für Wiederaufbau (KfW) office that was opened in Côte d’Ivoire’s economic centre, Abidjan, in 2017. A regional office of the Import Promotion Desk (IPD) was also opened there in 2022.

In 2019, Germany exported goods to the value of $280 million to Côte d’Ivoire and imported goods worth $592 million, mainly raw cocoa for Germany’s cocoa processing industry.

Negotiations on an Economic Partnership Agreement (EPA) between the EU and 16 West African states have been in progress since 2014. Since Nigeria has not yet ratified the Agreement, however, it cannot be put into effect. Besides Ghana, Côte d‘Ivoire is the only country in West Africa to have concluded an interim agreement to promote trade with the EU to bridge the gap, and this agreement is already provisionally in force.

There is also the “Reform Partnership” between Germany and Côte d‘Ivoire, which has been in place since 2017 as part of the G20 Compact with Africa initiative. The goal is to make the environment more attractive to private investment, and support training and professional development for urgently needed skilled workers. In June 2021, the Federal Government pledged about €73 million in new funding for Côte d’Ivoire and raised the prospect of further pledges. The core themes for future cooperation were set down as (1) Climate and energy; (2) Training and long-term growth for good jobs; and (3) Environment and natural resources.

Agriculture is the most important sector of the economy in Côte d’Ivoire in terms of employment and export income. The country is the world’s second-largest producer of cocoa, with a market share of around 40 percent, and a major producer of unprocessed cashew nut kernels, coffee, palm oil and rubber. The fact that cocoa accounts for about half of the country’s export volume, however, highlights two key problems: Firstly, its low level of diversification leaves Côte d’Ivoire highly susceptible to external shocks and, secondly, only a very small part of the value chain is located in the country itself.

The country therefore faces the challenge of needing to bolster other parts of its economy besides agriculture, and to achieve greater productivity in its agricultural sector. There are opportunities in both of these areas for Germany to take its partnership with Côte d’Ivoire to a new level. By exporting German agricultural technology, it could encourage more intensive agriculture – both conventional and organic – and thus also contribute to the promotion of socioeconomic development. Innovative technologies are already being used to boost yields, by using drones to monitor production, for example.

Well-educated Ivorians emerging onto the labour market year after year and failing to find formal employment are also establishing a lively start-up scene. The “Canaan Land” network, for example, aims to encourage sustainable agriculture and bolster the position of female smallholders. “PASS SANTE MOUSSO” and “COLIBA” offer services in the healthcare and waste management sectors. This comes with a high level of openness to innovation and technology. Innovative companies from Germany can also find potential here to expand or pilot business models. Many international players are already very successfully offering digital services in areas such as FinTech, Quick Commerce and mobility. Even so, the market is far from being saturated, and there is great readiness on the Ivorian side to become involved.

Cooperation in the context of the Reform Partnership also opens up opportunities for German companies. Specific examples include efforts to expand and modernise the electricity network in Côte d’Ivoire, including the generation of additional power via privately operated solar power stations.

• Germany is one of a total of seven member countries of the EU that have not yet ratified the interim EPA with Côte d’Ivoire. To bolster economic interaction, Germany should ratify the Agreement as quickly as possible, and also encourage its partners in Europe to ratify it sooner rather than later. Only then will it be possible to apply the Agreement in full and get the most out of its potential.
• Germany should also constructively monitor the further integration process of Côte d’Ivoire as part of ECOWAS. As a mechanism for regional integration, ECOWAS is an important element in the successful refinement and implementation of the African Continental Free Trade Area (AfCFTA). In the longer term, Germany should advocate at a European level for a comprehensive trade agreement between the EU and AfCFTA.
• To establish a future-oriented innovation partnership, it is essential to improve the overall conditions for private business in the country. This includes clamping down on corruption and improving security and the rule of law in particular. As part of the reform partnership already in place with Côte d’Ivoire, Germany can link future commitments to demonstrable progress in these areas.
• Increased cooperation also depends on the extent to which Ivorian companies can access well educated, skilled workers. To align university education more closely with the needs of the labour market, additional support should be provided for the dual-study model in the form of collaborative arrangements between German universities and their counterparts in Côte d’Ivoire.
• The targeted promotion of women’s rights could combat the structural disadvantages faced by women in the area of land ownership rights. This disadvantage has so far been a barrier to improvements in efficiency and the expansion of agricultural activities.

Dr Stefanie Brinkel heads the KAS Regional Programme Political Dialogue in West Africa, based in Abidjan.

Gunter Rieck Moncayo is policy advisor for “Economy and Trade Sub-Saharan Africa” at the Department of European and International Cooperation.