Ivory Coast economic ‘miracle’ risks morphing
Following a string of mutinies, plummeting cocoa prices, depressed growth and social unrest, Ivory Coast’s economic “miracle” has taken a battering and runs the risk of turning into a mirage. Crippled by a decade-long conflict that began in 2002, the world’s top cocoa producer has made a spectacular comeback since President Alassane Ouattara took office in 2011.
Despite being reelected two years ago, Ouattara faces mounting woes that are threatening his authority, his credibility — and his efforts to lockdown the nation’s economic recovery.
Ouattara has on several occasions admitted to being “hurt” by a string of mutinies by disgruntled troops since January.
And after the latest four-day protest, he is once again in a precarious position.
While most Ivorians don’t approve of the uprisings, they don’t understand the president’s volte-face — in January, he promised the mutineers a bonus.
Then last week he appeared to accept a televised “apology” in which a spokesman renounced their financial demands.
But the apparent PR stunt backfired, reigniting a protest which shook the country, leaving four dead and nine wounded.
In the end, Ouattara was forced to capitulate in a move damaged his credibility.
“In Africa, your word is sacred, you don’t go back on your word,” said Ibrahim Yameogo, a trader in Bouake, the country’s second city.
“The government has not come out of this weakened but actually strengthened.
It has managed to get through a difficult situation,” insisted Defence Minister Alain-Richard Donwahi.
In a country where the average monthly income for a family rarely exceeds $340 (300 euros), the sums pledged to the 8,400 disgruntled soldiers are huge.
Under the terms of this week’s deal, each soldier will receive a payment of seven million CFA francs ($11,000/10,700 euros) by June, say sources among the mutinous troops.
When that sum is added to the initial 5.0 million CFA francs paid to each of them in January, it amounts to quite a hefty bill of more than $170 million.
Although the government has refused to comment on the numbers involved, officials have insisted it had the “capacity” to pay.
“With a total budget of 6,500 billion CFA ($11 billion) we know how to find the means,” said Communications Minister Bruno Kone.
If the mutineers receive tranche as promised, that amount to around 1.0 per that ultimately the second alone will cent of the state’s annual budget.
“It is easy to spread these 150 million euros across different budget items, but we’re in a time of falling cocoa prices,” explains Ivorian political scientist Jean Alabro, noting the 35 per cent drop in prices between August and March.
So important is cocoa for the national economy that the government last week revised down its budget with a 9.3 per cent reduction in investments. “The country’s growth is driven by investment, notably foreign investment,” said Alabro.
These foreign investors could be scared off by such unrest at a time when the government is trying to negotiate the sale of up to $1 billion in Eurobonds.
“In this situation, it’s problematic. It is as if a person whose house burns down every month goes to see the bank to borrow money to buy furniture,” he said.
But Kone brushed off any suggestion the government had botched its handling of the crisis, or that the unrest within the army had scared off investors.
“Ivory Coast remains as attractive as it was before: Its economic capacity is there and its resilience has been demonstrated, despite the difficulties in the cocoa market,” he said.
Capitulating to the mutineers’ demands also risks triggering a domino effect — which already happened in January when other troops left out of the deal began demanding bonuses.