Robust growth in a Presidential election year

Côte d'Ivoire’s robust growth is expected to continue, with GDP forecasted to increase by +7% in 2024 and 2025, significantly outpacing its Western African neighbours such as Nigeria and Ghana. Inflation is projected to remain among the lowest in the African continent at 2.8% in 2025, after 3% in 2024, thanks to the currency stability of the Western African Franc.

Growth in 2025 will be primarily driven by private consumption and private sector investment, following a reduction in government spending that began in 2023 after the peak in investment in preparation for the Africa Cup of Nations. This robust growth has been taking place notwithstanding a challenging climate for agriculture, which accounts for 20-25% of GDP and 7% of total export revenue. Climate distress caused by El Niño reduced rainfall and significantly impacted cocoa output in 2024; 2025 is expected to bring higher precipitation. Cote d’Ivoire’s main exports fell below 2mn tons in 2023, 20% below average, and is projected to have been just above 2mn in 2024. Cocoa prices surged to historical highs in the spring of 2024 and although there has been a moderate decline since then, prices remain well above historical averages.

Cote d’Ivoire’s robust economic growth has been heavily commodity driven. Besides cocoa, exports include oil, rubber, gold, nuts and cotton, which introduces high volatility and cyclicality to the nation’s revenues. The oil industry has gained momentum with the discovery of a new oil field, increasing potential oil reserves by 25%, and by an increase in the production capacity from 30,000 barrels/day to 40,000 in early 2024. While it is still a modest oil exporter, oil represents 15% of total exports and its share is expected to continue growing as global oil importers seek new markets.

The stable macroeconomic environment brought both by political stability and the institutional framework of the West African Economic and Monetary Union (WAEMU) has positively contributed to economic growth since 2012, with growth rates between 5% and 10% (except 2020). The positive macroeconomic signalling has also reduced the cost of financing for the country, which currently enjoys some of the lowest spreads on the continent. In January 2024, Côte d’Ivoire was the first African nation to return to the financial markets post-Covid, issuing two oversubscribed Eurobonds primarily for debt-management purposes, thereby smoothing debt liquidity ratios. Since then, major rating agencies have improved its rate or outlook. Debt stands at 60% of GDP and under the current 40-month IMF arrangement, the fiscal deficit should return to the WAEMU target of 3% by 2025.

The next presidential elections in Côte d'Ivoire are scheduled for 2025. The presence of President Alassane Ouattara – who has been in power since 2011 – on the ballot would likely shift the balance in his favor, ensuring policy continuity until 2030. However, significant questions remain regarding his age (now 82) and the capacity of the country’s political system to peacefully transition to a newly elected democratic leader post-Ouattara. The last transition in 2011 resulted in civil conflict. Local and regional elections held in the fall of 2023, following the organization of the Africa Cup of Nations, demonstrated continued support for Ouattara’s party.

Instability may arise from external sources as Côte d'Ivoire's three northern neighbors – Burkina Faso, Mali and Guinea – are all ruled by military juntas. Following a decade of political instability and a surge in terrorist groups, these countries, plagued by weak governance, turned to military rule. Côte d'Ivoire's most challenging relationship is with Burkina Faso, with which it shares strong commercial ties. Côte d'Ivoire serves as the gateway for Burkina Faso’s trade, and over 4mn Burkinabe live in Côte d'Ivoire. A terrorist organization has established a presence in the natural park between the two countries, coinciding with Burkina Faso severing ties with ECOWAS, the regional union that facilitated security cooperation. As a leading country in both ECOWAS and WAEMU, Côte d'Ivoire will need to intensify its diplomatic efforts to find solutions that not only address short-term issues but also ensure long-term stability for the Sahel and West Africa as a whole.

Looking westward, Côte d'Ivoire has recently found a new partner in Senegal, despite marked contrasts in leadership and age – Senegal’s president is among the youngest on the continent. Through the signing of several memorandums of understanding to enhance trade, investment, business exchanges and people-to-people connections, both countries appear committed to increasing African intra-regional cooperation.