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Quick Facts
- Population:
- GDP (PPP):
- $37.0 billion
- 2.6% growth
- 2.2% 5-year compound annual growth
- $1,681 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
Côte d’Ivoire’s economic freedom score is 54.3, making its economy the 126th freest in the 2012 Index. Its score is 1.1 points lower than last year, reflecting a significant decline in property rights. Côte d’Ivoire is ranked 24th out of 46 countries in the Sub-Saharan Africa region, and its overall score is slightly above the regional average.
Côte d’Ivoire has demonstrated little progress in strengthening the four pillars of economic freedom, despite some efforts to improve macroeconomic stability and growth potential. Measures aimed at strengthening management of public finances and reforming outmoded government economic structures have the potential, if implemented determinedly, to foster a more dynamic private sector. Although overall progress in public-sector reform has been slow, the government has maintained its policy of divesting state-owned enterprises.
Social and political instability continue to prevent meaningful progress in economic development, and conditions have deteriorated over the past year. The overall business climate remains unfavorable for long-term private investment and productivity growth. Property rights are severely undercut by a weak judiciary, and corruption is debilitating.
Background
In 2002, civil war split Côte d’Ivoire between a rebel-controlled North and a government-controlled South. Despite the 2007 Ouagadougou Accord and the presence of U.N. peacekeepers, the country remains in crisis. President Laurent Gbagbo was ousted in April 2011 by French-backed rebels and detained in the North for trial. Côte d’Ivoire is the world’s leading producer of cocoa. The agricultural sector employs over 60 percent of the population and accounts for about 25 percent of GDP. Much economic activity, including regional trade, has moved to the informal sector, and most businesses are operating at far below capacity. Côte d’Ivoire’s announcement in July 2011 that it would not pay interest to its bondholders was a serious setback for the financial and banking sectors.
The rule of law has been weakened since the nation descended into war early in 2011. Protection of property rights is fragile. The judiciary is constitutionally independent but remains inefficient and vulnerable to political interference. Laws to combat corruption are not enforced effectively. Government corruption affects judicial proceedings, as well as customs and tax enforcement, and erodes accountability within the security forces.
The top income tax rate is 36 percent, and the top corporate tax rate is 25 percent. Other taxes include a value-added tax (VAT) and a tax on interest, and the overall tax burden is equal to 16.5 percent of total domestic income. Government spending is equivalent to 21.1 percent of total domestic output, with deficits widening to 2.3 percent of GDP and public debt hovering around 67 percent of GDP.
Despite the recognized need for business law reforms, action has been marginal. Starting a business takes more than the world averages of seven procedures and 30 days, as well as minimum capital equal to twice the level of annual average income. With development of a modern labor market lagging, the informal sector is a growing source of employment. Inflation has been modest, but the government regulates the prices of many goods and services.
The trade weighted average tariff rate is 7.3 percent, and non-tariff barriers further limit trade freedom. The investment regime is almost irrelevant in light of ongoing political and social instability. Despite some modernization and restructuring before the 2011 crisis, the banking sector lacks the capacity to support a more vibrant private sector. The government has sold its shares in smaller banks but maintains holdings in several larger institutions.