Côte d’Ivoire’s economic growth prospects high – Moody’s

Moody’s Investors Service on Monday said the prospects for Côte d’Ivoire’s economic growth are high following institutional reforms and a strong budget revenue performance.

In an email copied to ghanabusinessnews.com, the rating agency forecasts Côte d’Ivoire’s GDP growth at 8.1 per cent in 2015 and 9.0 per cent over the next 12-18 months.

“While weak institutional strength poses a key challenge for Côte d’Ivoire, we expect reforms and public infrastructure investment to underpin high economic growth in 2015-16”, Aurelien Mali, Senior Analytical Advisor for Africa at Moody’s said.

The rating agency said though agriculture is the largest component of Côte d’Ivoire’s economy and the country as a major exporter in the region is subject to commodity price volatility, especially cocoa, its economy is supported by diversification as seen in the increase of private investment in the energy sector.

Moody’s notes that Côte d’Ivoire’s budget revenues have remained relatively strong at around 20 per cent of GDP, keeping up with the high nominal GDP growth seen in the last four years.

The agency also expects that the government’s debt burden will likely remain moderate, at around 40% of GDP over the next few years.

“While public infrastructure investment has caused the government’s expenditure to trend upwards, fiscal deficits have remained under control between 2012 and 2014. Public finance risks have reduced, as illustrated by moderate budget deficits, 2.2 per cent of GDP in 2014”, Aurelien Mali said.

With some political stability following successful presidential elections in 2011, Moody’s now expects successful presidential elections in October to provide another five-year mandate to further reduce risks.

However, Moody’s notes the risk of political turmoil, following years of political unrest prior to 2011, when Côte d’Ivoire’s civil war was quelled only by international intervention.

By Emmanuel Odonkor