Can the resilience of the Ivorian economy absorb the consequences of the pandemic and boost growth? It was with this open question, up to the challenges of the African and global economy that the fifth edition of the Bloomfield Investment Corporation conference kicked off. The opening panel, moderated by journalist Alain Foka, will be broadcast this Sunday, June 6, 2021 on RFI and France 24.
Beyond the Sofitel Abidjan and the virtual world, all classes of market finance but also so-called seated finance (accountants, lawyers, legal advisers, notaries) were represented. Credit risk and insurance specialists, economic intelligence strategists, the princes of structured finance, coffee-cocoa and beans traders, futures market contractors but also diplomats, recognizable by their pinstriped suits, financial analysts, well taped earpieces, not to mention what some in the shameless profession of journalists call the necessary evil of finance: vulture funds. The communicators completed this mosaic which attentively followed the opening panel enhanced by the presence of Adama COULIBALY, Minister of Economy and Finance, Coulibaly Yacouba PENAGNABA, President of the National Authority for the Regulation of Public Markets, Ahmadou BAKAYOKO , DG CIE / SODECI and, of course, Stanislas ZEZE, CEO of Bloomfield Investment.
In his remarks, the Minister of the Economy insisted on the resilience of Côte Ivoire which has a growth rate expected of 2% and not 1.8% as indicated in the Bloomfield report presented to the speakers. The Ivory Coast is therefore in a positive resilience and has given, recalls the minister, “no sign of recession”. From the outset, the money manager calls for
correct certain expressions referring in particular to the “third term” or, for example, to a “situation of insecurity in the country”.
Moreover, the COVID period has been an opportunity to accelerate the transformation of the economy. A sort of successful crash test by the Ivorian agricultural sector made up of several speculations that complement each other in the event that a crisis arises.
On the subject of debt, Côte Ivoire is at 47% against a ceiling indicator of 70% and debt sustainability is regularly tested. In addition, Côte Ivoire does not borrow dearly, short-term commitments in CFA are of the order of 3% and 5% on average on bonds.
For his part, Coulibaly Yacouba PENAGNABA, President of the National Authority for the Regulation of Public Procurement, noted the dynamics of local champions, which began in 2007 with the access of small SMEs to public procurement. In Côte d’Ivoire, successful bidders must award at least 20% of the contracts they win to SMEs. For example, the allocation of contracts has been revised so that the lots are of moderate size in order to allow the submission of SMEs. The procurement deadlines have been revised to 104 days and the president would have liked the report to indicate this.
Continuing his remarks in reaction to the Bloomfield report, Coulibaly Yacouba PENAGNABA considers that “the transparency or lack of transparency foreseen is a bad perception since the cell for awarding public contracts includes members who are not from the State but from the State. civil society and the private sector, thus ensuring the transparency of decisions ”. Sufficient to ensure transparency?
Adding to this point, the CEO of the CIE explained that during the COVID period, SMEs delivered masks made locally and that this helped reduce unemployment. In addition, the number of industries established in Côte d’Ivoire during the COVID period is 50% more than it was in the previous year. To support this trend, energy has been put into perspective in accessing more than 6,000 localities against 2,000 and a number of subscribers that has tripled to 3 million. According to the CEO of the CIE, the dynamics of resilience can be seen in the numbers.
As far as he is concerned, Stanislas ZEZE, CEO of Bloomfield, author of the report, draws attention to the fact that debt is the main resource and not the complementary one. “When we get into debt in foreign currency, we are inevitably in a risk situation”, explains the CEO of the rating agency, estimating that own resources must be better mobilized and accentuated because, he argues, “Shocks can reappear or confinements can be spread over longer periods”.
Clearly, the effective transformation of the economy is necessary to offer more resilience continues Stanislas Zézé, noting that the Ivorian economy is “owned by foreign players, who are not intended to reinvest in the country”. Ultimately, we must therefore train SMEs not only ensure their access to “local content”, SMEs must be trained to be able to compete.
The second panel was devoted to debt management. Speaking on the subject, the Budget Minister, Moussa Sanogo, immediately indicated that the debt crisis does not concern Côte d’Ivoire and that the country could not be considered to be too indebted: the debt is about 48% of the GDP and in absolute value is FCFA 16,000 billion (24 billion euros). The borrowing rates are between 3% and 5% depending on the financial instruments in local currency FCFA so, opines the minister, we cannot consider that it is too expensive. On fiscal pressure, the norm is 20% in the WAEMU, but the Ivory Coast is at 12%, so far from the threshold. The fact that the pressure is felt on a few actors is a common responsibility. For example, deplores Minister, the small shopkeepers of the district are known and frequented by everyone but are non-existent in the tax base. But they have a form of authorization to set up an authority, perhaps the town hall, so the idea is to use technology to pool the different government registers in order to cross-reference the data so that everyone contributes. It makes sense to want everyone to participate in the tax base. However, the farmer who has an annual income of FCFA 400,000 is difficult to take into account.
Rather than burden the peasant income with a tax, the Ivorian government is therefore trying, through export taxes, to levy something on these actors.
According to the DG of the Treasury, Côte Ivoire is far from being over-indebted. And dare the comparison, which has become classic in African forums, with Japan and its debt / GDP ratio which is close to 200% while France peaks at a rate of 104%. The United States is in the same trend continues the minister, estimating that “the price of the debt depends on the climate that we install in our countries”.
The duration of international loans tends to adjust to the date of our elections, continues the DG of the Treasury, who believes that we must do so to calm the social climate.
Regarding the broadening of the base, we must also think of non-fiscal resources. “In France, for example, police tickets alone bring in EURO 1.6 billion euros to the state. Are we ready to impose this in Côte d’Ivoire, wonders the minister, if only with respect for the priority on the right? The laughter from the audience shows that our responsibility has not yet been committed on these themes.
Taking the debate from another angle, Paul-Harry Aithnard, Managing Director of Ecobank Côte d’Ivoire believes that “bankers are unfortunately not doing enough” in financing the economy. “For example, we have to go further than what is currently being done in terms of debt”. Taking the ball on the rebound, the banker Charles KIE believes that the balance sheet of banks prioritizes public cash commitments to loans to the private sector. On the other hand, proclaims DG Ecobank, “we have a problem of equity for our SMEs. Debt alone cannot unfortunately develop our countries ”. The CEO of Ecobank also estimates that 28 banks for a single country like the Ivory Coast is too much.
Addressing the issue of the number of banks, the Budget Minister believes that reducing the number of banks is not so easy in a community environment.
The General Manager of the Treasury, M ASSAHORE, for his part specified that the capital of the banks was raised to 10 billion FCFA to imitate Nigeria where the capital rose to 100 billion FCFA resulting in regroupings. “Why was there no regroupment in French-speaking Africa? “Remaining in its dynamics, the DG of the Treasury specifies that” our collective responsibility is once again engaged “.
In this fascinating debate, Félix Edoh Kossi Amenounvé, Director General of the Regional Stock Exchange (BRVM) unfortunately believes that we always borrow dearly at the state level and that neighboring countries have an inflation that can justify the rates that we their bill. “We need to make our areas more attractive, by ensuring that we meet the appetite of investors who want to take positions on our debts, even in FCFA. It is important, for example, to ensure that the regulation is rapid and responds to products such as social bonds, green bonds etc… which are tools allowing social investors to come to our area ”.
Finally, concludes Mr. Amenounvé, it is necessary to think of depositaries, global custodians to keep and compensate on the format of the bonds that investors would hold on the Euroclear format.
The conference continued with the other panels on improving the health system and the consequences of COVID on our populations. Overall it is noted that our capacities must be strengthened, it is worrying to note for example that the police seize 500 tons of fake drugs and that our incinerators have only 80 tons in capacity.
