As a prelude to the second edition of the country risk conference Côte d’Ivoire, scheduled for May 31 in Abidjan, Stanislas Zézé, CEO of Bloomfield rating agency, discusses the issues and prospects of this event organized in partnership with Financial Afrik.
You are organizing the second edition of the conference “Risk -Pays Côte d’Ivoire”. What are the objectives of this event?
The second edition of the conference debate on the Ivory Coast risk country, is part of a logic of pedagogy, discussions and constructive exchanges, and search for solutions for a better organization of the business environment and the strategy of sustainable development. The originality of this initiative is that it is African and led by a large majority of Africans who now have no complex to talk about the weaknesses and opportunities of African countries. What really matters to investors today is not the positive information but the true information on the absorptive capacity, management capacity and resilience to external shocks of African countries. There is still a strong asymmetry of information between foreign investors and African countries seeking foreign direct capital and investment. Who better than Africans can talk about Africa in all its outlines? We will hold one or two country-by-country debate conferences each year on a particular African country. The conference will have link in the country concerned.
Country risk assessment requires analysis of a number of data. Exactly, are there differences of approach between the international agencies and their African counterparts?
The evaluation methodologies and the evaluated criteria are generally the same, with some differences depending on the geographical area and the realities specific to the countries evaluated. However, the approach may be different depending on the angle and motivation of this analysis. The practical knowledge of the field can make a big difference in the actual evaluation because the cultural and historical dimension of the African countries can have a particular impact on the analytical approach.
It is important to distinguish the country risk rating from the sovereign credit rating even if there are similarities. The financial rating is the exercise by which the rating agency will determine the credit quality of the country concerned, ie its ability and willingness to meet its financial obligations. While country risk will put more emphasis on the business environment and its ability to attract local, regional and international investors.
With regard to country risk analysis on the African continent, it seems to me that for a long time this analysis was done by people from outside the continent who knew him little or sometimes not at all. The consequence is that the analyzes were biased and sometimes full of prejudices because of the difficulty of obtaining qualitative and quantitative information on the continent when one is outside.
Today the situation has changed, you have African rating agencies that take over and show that they are better equipped to make analyzes closer to reality and monitor the risk on the ground. Bloomfield has created for the past 5 years, an economic intelligence department dedicated to performing sector risk analyzes, country risk analyzes and building indices and interest rate curves. We organize round tables of discussions and conferences to discuss the results of our research with politicians, diplomats, multilateral development institutions, students, university professors, NGOs and associations of all kinds. The idea is to develop the spirit of constructive debates and intra-African exchanges.
What is your assessment of Côte d’Ivoire’s country risk at two years of the 2020 presidential elections?
Exactly we will talk about it at the conference debate of May 31 in Abidjan. The Côte d’Ivoire Country Risk Report produced by Bloomfield deals with this issue given its importance to Ivorians and the international community.
Indeed, 2020 represents for Côte d’Ivoire and the international community a crucial issue since it marks the end of a cycle of two presidential terms started in 2010. The experience of the political alternation that has taken place regrettably made by a military crisis has left a bad taste to the observers who wonders who the unfortunate experience of 2011 will not repeat in 2020. This is a perfectly legitimate fear but Bloomfield we have another reading things. We believe that the 2020 presidential election will be a real test of democracy for the Ivory Coast. This is the first time in Ivory Coast’s electoral history since independence that no one can say with certainty who the President of the Republic might be after the 2020 elections. In the past this question would be child’s play. We think the Ivory Coast is at a turning point in its history so 2020 becomes a historic date. We do not anticipate a major crisis even if we think that it could certainly have big internal quarrels in the presidential majority. The stakes are certainly at the level of the coalition in power because the opposition in Ivory Coast for the moment is fragile and almost non-existent in the balance of political force.
Last year, there was much talk of the consequences of the fall in cocoa prices and the level of indebtedness. What is the overall state of Côte d’Ivoire’s macroeconomic balance by 2020?
Pretty good I will say. The level of indebtedness is around 42% of GDP against a benchmark of 70%. Economic growth that will be between 7 and 7.5% until 2020. An inflation rate that will remain low at less than 2% and a budget deficit that will have to be around 3% at the dawn of 2020. However, the poverty rate remains high all the same.
With regard to the drop in cocoa prices, you have seen that it has not affected the Ivorian economy significantly since stabilization forecasts in the event of a fall in the market price had already been made by the Ivorian government.
In addition the Ivorian economy is more and more diversified so it is more resistant to external shocks. This experience of cocoa prices should encourage the authorities of this country to accelerate the diversification and industrialization of the economy so as to have a more resilient economy and export more finished products than raw materials.
Some agencies like Coface say they do not completely discount the risk of devaluation of the CFA Franc. What is your opinion ?
For the XOF zone (CFA UEMOA) a possible devaluation of the currency is not on the agenda. The economic performance of this currency area is on the rise and the industrialization programs of the economies of this area are well underway. However, what should worry the governments of this currency area is to start thinking about a substantial improvement in the governance of the currency system FCFA which is now obsolete, hearing to implement the famous single currency ECOWAS of which speak the leaders of the 15 countries of this economic and political zone.
Finally, who is able to attend this conference?
This is a free conference but by invitation by Bloomfield. This conference will be attended by diplomats, institutions, development banks, merchant banks and commercial banks, academics and researchers, business leaders, politicians, public administration, employers and many others. others.
