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Volume 3 of the Multi-dimensional Review of Côte d’Ivoire is the third phase of the study, which began in September 2014. The OECD Development Centre worked closely with Côte d’Ivoire authorities during this phase. A multi-disciplinary team of experts from the Multi-dimensional Country Reviews (MDCR) Unit, as well as an infrastructure expert, worked in close partnership with the office of the Côte d’Ivoire prime minister to produce the report. The experts were actively supported by an Ivorian liaison team that helped organise the 21-30 September 2015 mission and provided access to many of the local documents and data cited in the report. A group of top Ivorian experts was also in Paris between 12 and 19 November 2015 to work with the OECD experts.
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Côte d’Ivoire’s past shows that economic growth has not been sufficiently sustainable to allow the country to achieve emergence: that is to say, progress towards the status of an emerging economy or market. The sustained growth of the 1960-80 period, the Ivorian “miracle”, was followed by a period of long decline. Per capita gross domestic product (GDP) doubled between independence in 1960 and the end of the 1970s. But 15 years later, into the mid-1990s, it receded to its 1960 level and stagnated there until the recent revival.
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This chapter brings together findings from the three volumes of the Multi-dimensional Review of Côte d’Ivoire. It describes Côte d’Ivoire’s objective of reaching the status of emergent economy/country by 2020, which requires ambitious targets, avoidance of past errors, and the laying of solid development foundations. No universally agreed definition of emergence exists but there is a general agreement that it applies to what used to be called developing countries that have achieved some industrial capacity and are on the path to becoming industrialised nations. Economic development will rely on a balanced economic model for inclusive and sustainable growth relying on structural transformation that creates jobs and extra added value. Enhanced regional co-operation and integration will play a key part in making good use of opportunities in all sectors. Emergence also requires effective and sustainable infrastructure and better access to financing. The workforce will need to be take advantage of high-quality education and suitable skills. A tax policy well adapted to funding public goods and services will also be essential.
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To achieve the status of an emerging nation, Côte d’Ivoire will need to move towards an economic structure that generates growth and jobs for people in all parts of the country, doing so by diversifying economic activity and relying on existing comparative advantages, as, for example, in agricultural processing. A vigorous and more professional services sector will support growth in other sectors while directly boosting the expansion of small and medium-sized enterprises (SMEs). Being competitive requires an encouraging investment climate, well-accepted quality standards and robust competition. Trade must be encouraged, especially through regional integration, to conquer foreign markets. Land and property laws that make best use of economic potential can also help development.
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To become an emerging economy, Côte d’Ivoire must strengthen its infrastructure, in terms both of its quantity and quality. Not everyone has access to essential parts of it (electricity, transport and telecommunications), which hampers growth and development. Besides, the costs of some services (such as transport and telecommunications) that rely on infrastructure are higher than in other emerging countries or relative to average household income, which makes the Ivorian economy less competitive. Becoming an emerging economy is only one stage in development, so Côte d’Ivoire should pay attention to sustained, long-term infrastructure investment, in respect of both government spending and the environment.
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The growth of the Ivorian economy is handicapped by a lack of funding. For firms and individuals to have easier access to financing, more bank loans are needed and alternative funding sources have to be developed. Lower credit risks and a more effective guarantee system will cut the cost of financial intermediation and result in more lending. More funding for loans is needed, with longer repayment times, to develop a financial system that can meet the demands on the road to emerging nation status. The issue of financial inclusion is of prime importance.
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There has been substantial investment in human capital in Côte d’Ivoire, allowing the country to meet its immediate economic needs, but today the quality of that human capital is increasingly an obstacle to economic transformation. The government is trying hard to expand access to education, an initiative that has produced rapid results, but three areas need political attention; upgrading education through better initial and on-the-job teacher training; adapting technical and vocational education to the labour market through greater employer involvement in devising and teaching programmes; and giving certificates to workers for their skills rather than for what courses they have taken.
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Côte d’Ivoire’s tax system needs radical change if the country’s development and economic transformation goals are to be achieved. Partial reforms will not do. Complete tax reform, adapted to present conditions, must create well-balanced taxation that generates revenue and motivates taxpayers. Fundamental features will include a gradual reduction of customs tariffs and development of other taxes such as value-added tax (VAT). Far-reaching cross-sector reforms should also produce a stronger and simpler tax system with fewer exemptions and up-to-date procedures. They should result in an efficient, competent and transparent tax administration to increase the trust of taxpayers and fight fraud.
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This chapter describes cross-sector constraints affecting the proposed reforms and pre-conditions for carrying them out and speeding up progress towards the status of an emerging nation. It suggests creating a top-level unit to implement reforms and steer change and lists the major features of support needed for them: communication, co-ordination and follow-up. The condition of emerging nation must be the fruit of an agreement between the most senior politicians and be conveyed to all Ivorians, including the private sector. The government must ensure good co-operation between public bodies, since most of the reforms will need the involvement of many participants. Any economic transformation depends on robust monitoring and assessment of the reforms, so a table of indicators adapted to the country’s emergence is presented.
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In order to achieve the status of an emergent economy, the country needs to modernise its structures so as to promote greater job creation potential. Industry and services play an important role in the economy but most Ivorians still work in agriculture, a sector which is not growing very fast. The country needs to move towards industrial activities that generate more jobs and more added value, such as more sophisticated goods, and also use the services sector better by bringing it into the formal economy and rendering it more professional.