CÔTE D'IVOIRE

By Phillip Michelini

Office of Africa

U.S. Departement of Commerce
The resiliency of Côte d'Ivoire economy exhibited in 1996 should continue in 1997 and again provide a positive commercial environment for an expanding American business presence.The beneficial effects of the devaluation of the CFA franc in January 1994, combined with the dual programs of trade liberalization and domestic economic reforms, should again this year make Côte d'Ivoire the leading beneficiary of the economic expansion now underway in the 14 countries of the CFA Franc Zone. After a decade of negative growth, Côte D4ivoire has pursued a comprehensive structural reform program following devaluation, which has resulted in annual growth rates of 1.7 percent in 1994 ? 7.0 percent in 1995, and an estimated 7.5 percent in 1996.

The Ivoiran Government also carried out its second round of milti-party democratic elections for President, parliementand municipal authorities between October 1995 and February1996.
Over the last two years especially, private investment has increased in real terms and foreign direct investment has surged. For example, investments by the World Bank's private sector window, the International Finance Corporation, were flat prior to devaluation, but soared to over $100 million during 1994 and 1995. An expansion in the pace of the privatization of stateowned companies is also promoting private sector growth,with six enterprises sold in 1994, 13 more in 1995, and 30 additional slated for sale by mid-1997. One result has been a boom in the Abidjan Stock Exchange,whose index of stocks increased in value 63 percent in 1995 and 77 percent in 1996.

The growth in foreign investment should continue in 1997 due to the more business-oriented investment and labor codes now in place, and because of the planned expansion later this year of the Abidjan Stock Exchange to a computerized regional exchange covering the seven countries of the West African Monetary and Economic Union.

U.S direct investment has expanded steadily since 1994 with about about 50 U.S companies now resident in Côte d'Ivoire. There are major U.S investments now in petroleum/natural gas, housing, services, telecommunications, and transportation.
Côte d' Ivoire's international trade should benefit greatly in 1997 from the abolition of non-tariff barriers,with the exception of those deemed necessary for health or environmental reasons. A lowering of import duties in 1995-96 to an average level of 24 percent has facilitated two-way trade, except for those protective tariffs which remain imposed on major Ivorian agricultural imports like rice, flour, and sugar.

Pent-up Ivorian demand in 1995 led to an import boom, which helped propel American exports to a record $173 million. Also, the dissolution of the state trading company which handled rice imports resulted in a sharp increase in purchase in 1995 , which benefited U.S exporters. A slackening of Ivorian import demand in 1996 caused U.S sales to decline by about 15 percent to a projected $ 150 million (or a 6 percent market share of total estimated imports of $2.6 billion)

The slump was also partly caused by Ivorian restrictions on the importation of brown rice. Meanwhile, Ivorian sales to United States nearly doubled in 1996 to around $400 million.
This unexpected jump was due to a tripling of U.S purchases of Ivorian cocoa, resulting from the Ivorian Coffee and Cocoa Board's reduction of fixed freight rates to the United States , which permitted lower landed costs for U.S processors.

Good sales prospects for U.S goods and services includes major project opportunities in petroleum/natural gas, electric power generation, agro-business developpement, transportation, and telecommunications. Some of the most promising export sectors include: rice, wheat, consumer packaged goods,telecommunications equipement, automobiles,construction