Ivory Coast growth could fall to 3 pct: IMF


The International Monetary Fund said that Ivory Coast’s economic growth could fall to 3 percent this year, after weeks of political instability shook the nation and power cuts hurt business.

“The economic program for 2010 is being pursued in an economic environment that has deteriorated significantly. The socio-political events of February and recent power shortages have led to a slowdown in activity, and economic growth could fall slightly to 3 percent,” IMF official Doris Ross said in a press release, after a visit to the country.

It was below the Finance Ministry’s own forecast of 4 %.

Growth in 2009 was 3.8 percent, she said, noting that this was despite the financial crisis and that it marked the first uptick in GDP per capita since 1998, a year before a coup threw the country into turmoil.
“Benefiting from abundant rainfall and the rise in world cocoa prices, in particular, agriculture achieved significant progress,” she said.

Ivory Coast is awaiting elections needed to draw a line under years of instability and stalemate that followed a brief but divisive 2002-3 civil war.

Debt sparks interest

The world’s top cocoa grower is awaiting further debt relief from donors under the IMF-World Bank Heavily Indebted Poor Countries (HPIC) programme, but the World Bank has hinted that elections will have to happen first.

The elections, which have been repeatedly delayed since 2005, were scheduled for early this month, but President Laurent Gbagbo disbanded the government and the electoral commission in February, after accusing its then chief of illegally adding names to the voter register.

Opposition supporters staged nationwide protests, sometimes violent, in which at least seven people were killed.

The chaos reinforced the image of West Africa’s former economic giant as a volatile hotspot just when it needed to attract investment.

Yet debt bond investors seem undeterred a debt restructuring of around € 2.2 billion in defaulted Brady bonds for a new 23-year US dollar-denominated issue this month was well received by the markets.

Power cuts caused when a generator in Abidjan went down have hurt growth, although officials say it is running again.
“Bold measures should be taken to eliminate over time the electricity deficit and ensure the sustainability of the power supply and improve the business climate,” Ross said.

Ivory Coast has already benefited from extensive debt relief from major donors like France in the past year.

Source: www.af.reuters.com