IMF Releases Glowing Report on Ivory Coast Economy

A name not often associated with positive news stories has turned a corner. Reuters reported this week on new predictions by the International Monetary Fund (IMF) that show immense economic growth over the next three years.

A name not often associated with positive news stories has turned a corner. Reuters reported this week on new predictions by the International Monetary Fund (IMF) that show immense economic growth over the next three years.

According to the IMF, the Ivory Coast’s economy should expand by 7.9 percent by the end of 2015, and grow an average of 7.6 percent in 2016 and 2017. The Ivory Coast is the world’s top producer of cocoa crops, and the largest economy in West Africa. After a decade long financial crisis ended in 2011, the nation’s economy has posted strong numbers for growth, and according to the IMF prediction, should continue to do so for the next several years.

While most nations would be ecstatic to achieve growth rates like these, they actually fall somewhat short of earlier predictions that had put growth at an astounding 9.4 percent for 2015 and into double digits for the years following. The lowered expectations came from uncertainty over elections that have caused many investors to adopt a wait-and-see approach to investing in the nation’s economy.

Over the last several years, the Ivory Coast’s government has implemented enormous improvements to the nation’s infrastructure aimed at attracting more private sector investors and companies, and further spurring economic growth. So far, the plan has worked, though most of this improvement has come at the cost of increased government borrowing. Public debt will hover around 43 percent of GDP over the medium term, according to the IMF, while the cost of servicing the debt would increase to 13 percent of the nation’s total revenues this year. That is an increase from 10.8 percent in 2014.

Nevertheless, the Ivory Coast government has indicated that it intends to continue these infrastructure improvements for the near future, even increasing investment to 18.6 percent of GDP in 2015 (up from 16.1 percent in 2014).

Meanwhile, inflation expects to reach 2 percent this year and the IMF projects a deficit of about 2.6 percent of GDP. While most indicators are very positive for the nation’s continued growth, such heavy reliance on agriculture exposes the nation to downturns based on poor weather. Recent reports have also exposed extra-budgetary spending which has further concerned foreign investors. Nevertheless, the IMF report is overall positive for the Ivory Coast and predicts a continuing age of economic expansion for the long beleaguered nation.