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Ivory Coast - The Economy
For more recent information about the economy, see Facts about Ivory Coast.
SINCE ACHIEVING INDEPENDENCE from France in 1960, Côte d'Ivoire's primary economic objective has been growth. During the 1960s, growth was accomplished by expanding and diversifying agricultural production, improving infrastructure, and developing import substitution industries. Implicit in this strategy was the emergence of an expanding domestic market to support budding consumer goods industries. Income redistribution and Ivoirianization (replacement of expatriates with Ivoirian workers) were made subordinate to growth. Although these goals were politically desirable, redistribution and Ivoirianization would be impossible without growth, according to policymakers. Using revenues generated from agricultural exports, the government financed improvements to infrastructure--roads, ports, railroads, power generation, and schools. To finance increased agricultural production and industrial development, the government turned to foreign investment and imported technology. Much of the manual labor was supplied by non-Ivoirian Africans.
Paramount in this planning was the maintenance of economic links to France that were almost as extensive as the preindependence ties. Before independence, French public and private capital helped to support the government, ensured the internal and external convertibility of the currency, financed most major commercial enterprises, and supported the country's banking and credit structure. French enterprises in Côte d'Ivoire were a major employer of Ivoirian labor, and France purchased--often at rates higher than market value--most of the country's exports. In addition, French managers held most of the key positions in business, and French advisers occupied important posts in many government ministries.
Côte d'Ivoire's ties to France grew even stronger after independence. Between 1960 and 1980, the total French population in Côte d'Ivoire nearly doubled, from about 30,000 to close to 60,000, forming the largest French expatriate community. In the mid-1980s, four out of five resident French had lived in Côte d'Ivoire for more than five years. French citizens filled technical and advisory positions in the government (albeit in diminishing numbers) and were also evident throughout the private sector. Until 1985 Côte d'Ivoire also had the highest number of French-controlled multinational businesses in all of Africa, had the largest percentage of French imports to and exports from Africa, and, along with Senegal, received the largest French aid package in Africa.
Economic development in Côte d'Ivoire has passed through three phases. During the first phase, from 1965 to 1975, the economy grew at a remarkable pace as coffee, cocoa, and timber exports increased. Surpluses from exports speeded growth in the secondary (industrial) and tertiary (services, administration, and defense) sectors. Gross domestic product (GDP) grew at an average annual rate of 7.9 percent in real terms, well ahead of the average annual population growth rate of approximately 4 percent.
During the second phase, from 1976 to 1980, external changes in the world economic system reverberated within Côte d'Ivoire. Coffee and cocoa prices peaked in the 1976-77 period as a result of poor harvests in Latin America, but two years later prices declined rapidly. GDP continued to grow at an average rate of 7.6 percent per year; within the period, however, the growth rate varied from 2 percent in 1979 to 11.5 percent one year later. The government, which had responded to the boom phase by vigorously expanding public investment, was by 1979 forced to rely on foreign borrowing to sustain growth. At the same time, the declining value of the United States dollar, the currency in which Côte d'Ivoire's loans were denominated, and rising prices for imported oil adversely affected the country's current accounts balance. By the end of the second phase, Côte d'Ivoire was at the brink of a financial crisis.
During the third phase, from 1981 to 1987, the economy deteriorated as terms of trade declined, interest rates increased, the prospects of new offshore oil development evaporated, and agricultural earnings dropped. Following a record 1985-86 cocoa harvest, the economy rebounded briefly; however, falling cocoa prices quickly eroded any gains the country had hoped to achieve, and by 1987 President Félix Houphouët-Boigny had halted further payments on foreign debt. Subsequently, Côte d'Ivoire was forced to adopt a structural adjustment program mandated by the International Monetary Fund (IMF) that limited imports, subsidized exports, and reduced government spending.
You can read more regarding this subject on the following websites:
Economy of Ivory Coast - Wikipedia
Ivory Coast Country Studies index
Country Studies main page