Posted by: Martin | March 19, 2012

Encouraging Signs 2

I’ve been collecting encouraging signs coming out of the Ivory Coast lately, and couldn’t help noticing a few not so good signs as well. First the good news:

Privatisation/liquidation of Banks

In the end of January Ivory Coast’s President Ouattara said that four Ivorian state owned banks “only existed  to finance certain political leaders”, and opened up for them to be closed down or privatised. “If we (the state) should own a Bank it should respond to a specific objective or be liquidated progressively.” Ouattara said.

Source: L’Inter: Depuis Paris, le chef de l`Etat annonce la privatisation des banques publiques

Now what actually happens is a much stronger encouraging sign compared to what politicians say, so this is to be followed up on.

Even countries at the top of the Transparency International Corruption Index have problems with corruption at state owned enterprises, so how the Ivory Coast deals with these kind of things matters for grand corruption. Just the fact that Ouattara is frank about how these banks operated is an encouraging sign. I can imagine a situation where someone in Ouattara’s position would have kept the Banks going just like before, but for the benefit of himself and his inner circle instead of the previous regime.

Liberalisation of the Media

According to an AFP story from the beginning of March, the ivorian government plans to offer licences for 5 new private TV-channels to complement the public RTI and RTI2 channels.

Again, this is politicians speaking of what’s going to happen in the future and not something that has happened, but I see media and especially TV as a bellwether for authoritarian tendencies.  One of  Putin’s first priorities when coming to power was to stop a  humour show making fun of Russia’s politicians, and after that he proceeded to make all major tv-channels propaganda arms for the government, while still allowing critical voices in print media.

Gbagbo actually had a policy similar to Putin’s. Gbagbo was forced to allow opposition voices on the TV in the run-up to the 2010 elections due to UN pressure and the peace process, but when the result were out, national TV was straight away turned into a pro-Gbagbo propaganda machine and foreign cable channels were blocked, while opposition newspapers weren’t dealt with as quickly.

Guess it’s a dictator’s calculation that few people read newspapers and that TV is a much more efficient tool to reach the masses. So if a leader works on creating five new private TV channels – it’s a good sign. Someone with authoritarian tendencies would instead focus on controlling the existing TV channels.

More flights to Abidjan

Here’s a very concrete encouraging sign for the Ivorian economy: Brussels Airlines announced in the beginning of March that they will increase the frequency of flights from Brussels to Abidjan from 4 per week to 7 per week.

Praise from the IMF

The biggest positive news came from the IMF on the 15th of March.  Essentially, the IMF said the Ivorian economy is stronger than expected, that execution of the budget was above expectation, that good progress was made on various reforms and that conditions for the  IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme were met. I’m not sure I’ve ever heard such a positive statement from the IMF.

Here’s the Reuters story about it:

ABIDJAN (Reuters) – Ivory Coast’s economy will grow 8 percent in 2012 after contracting 5.1 percent in 2011, on stronger-than-expected post-conflict recovery, the International Monetary Fund said on Wednesday after meeting with Ivorian authorities.

The IMF also said the world’s top cocoa-growing nation has made progress in reforming its cocoa sector, a key condition which would enable it unlock debt relief under the IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme by June.

“The rate of economic growth for 2012 will be 8 percent and inflation below 2 percent,” IMF mission chief in Ivory Coast Doris Ross told journalists after the meeting.

“The economic recovery is stronger than expected and we are pleased with the efforts made in the reform of the cocoa sector,

and mission appreciates the execution of the 2011 budget and revenue growth in 2012,” Ross said.

Ross confirmed the World Bank’s view, which said in February that the reform of the cocoa sector, meant to provide farmers with a minimum price for their produce, was on track.

“Ivorian authorities have made considerable efforts and could benefit from a substantial debt reduction through the HIPC in June,” Ross said.

Emerging markets strategist at Standard Bank Samir Gadio said the IMF’s suggestion that the HIPC completion point could be reached by June was good news because the market had factored in the possibility of a delay over the reforms which have not been fully implemented.

He added that the good news, as well as the smooth power shift in the country with the appointment of a new prime minister, contributes to making “the upward price trend of the Ivorian Eurobond … virtually self-fulfilling.”

And from pro-government newspaper Le Patriote [in French]:

Elle a souligné que les autorités ont accompli des progrès considérables dans la réalisation des déclarations des déclencheurs relatifs au point d`achèvement. Et l`aboutissement pourrait servir de base pour l`atteinte du point d`achèvement Ppte d`ici fin juin 2012 et permettra à la Côte d`Ivoire de bénéficier d`un allègement global de sa dette. « Les résultats économiques en 2011 ont été mieux que prévus. (…) L`exécution du budget a aussi été mieux que prévue. Les dépenses sont restées dans la limite des objectifs fixés dans le budget et les allocations pour les dépenses d`investissement et de lutte contre la pauvreté ont été utilisées dans leur totalité. Tous les critères de réalisation quantitatifs pour fin décembre au titre de l`accord Fec ont été respectés. », a relevé Doris Ross. Précisant que de “ bons progrès ont ét réalisés dans l`avancement des réformes structurelles“. « La mission se félicite de l`achèvement du recensement dans la Fonction publique, l`approbation de la reforme du régime de retraite dans le secteur privé, la mise en place de tribunaux commerciaux, l`adoption de la loi sur l`exécution des décisions d`arbitrage et la création de centres de facilitation aux entreprises », a déclaré Ross.

Less encouraging signs

As to the bad news, nothing really serious, but worth mentioning:

-Ouattara started out imposing strict work hours with an early start for his ministers.  Now it seems – according to a second hand account – that it wasn’t possible to enforce an early start in the long run, and that the government has gone back to starting the work day later.  Also, I don’t think anything came out of the plan to give government ministers individual marks. Ok, maybe it wasn’t as good an idea as it originally sounded, but it would have been interesting to see.

-In handling the informal sector, my take is that the Ivorian government should strive to legalise, establish property rights and regulate it (lightly). I don’t have much data yet, but there seems to have been occasions where livelihoods of people in the informal sector have simply been destroyed by the government. It’s done for arguably good reasons like public health, but it’s still a worrisome sign.  Here’s one story from Reliefweb: Côte d’Ivoire: Livelihoods lost to bulldozers

-The transport sector reforms.  I’ve already mentioned the proposed import restrictions, but it also seems the government want private businesses in the transport sector to get subsidised loans to import new cars of a certain brand  (Mercedes) selected by the government. Apparently the Minister for transport Gaoussou Toure visited a Mercedes plant in Stuttgart  in Germany recently. I think there just isn’t enough purchase power for urban transport in Abidjan to support taxis and woro-woros being expensive new Mercedes. If the government pays for it by subsidising loans – well, it seems a waste of money compared to use older (but still good and environmentally sound) cars.

Also this whole reform sounds like a French style “dirigiste” plan for the government to manage and run private sector activities, which in Africa (and elsewhere) quite often end up in corruption and disaster.

I’m still kind of hoping that the Mercedes are only for bus or minibus use, and that public transport will be strengthened, but that the taxi / woro-woro business will be left mostly alone. The details are not yet clear.


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