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Cote d'Ivoire Infrastructure Report Q1 2012
Business Monitor International, Nov 2011, Pages: 52
Business Monitor International's Cote d'Ivoire Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Cote d'Ivoire's infrastructure industry.
BMI View:
While BMI continues to expect lacklustre growth in Côte d’Ivoire’s infrastructure market in 2011, it sees increasing likelihood of growth returning to the positive territory from 2012. A combination of favourable base effects and President Alassane Ouattara's pledge to focus on much-needed and delayed infrastructure projects will propel the industry back to positive growth. Though elections were a first positive step towards greater political and social stability, political risk remains elevated. As such, infrastructure financing will continue to rely on government spending and official development assistance in the coming years.
The following developments give us reasons to believe that optimism is returning to the sector, albeit gradually:
- In July 2011, President Ouattara announced the construction of a new bridge over the lagoon in Abidjan. Côte d’Ivoire’s poor transport infrastructure, deteriorating road networks and high number of military checkpoints have had a negative impact on foreign investment and BMI sees the current announcement as a strong sign of the government’s intent to bring its road and rail infrastructure to health.
- There are also signs that the business environment in Côte d'Ivoire's oil and gas sector may be starting to recover. During the same month, Joel Dervain, the Director General of Societe Ivorienne de Raffinage (SIR) refinery in Côte d'Ivoire, announced plans to invest EUR1bn (US$1.44bn) in the refinery of 80,000 barrels per day (b/d) over the next 10 years, in order to increase its annual refining capacity to 100,000b/d.
- BMI’s Africa Country Risk analysts forecast that real GDP growth should surge in 2012 as the economy recovers from the 2011 crisis, before settling into average growth above 3.0% per annum.
In light of these developments, BMI expects a robust 6% growth in construction industry value in real terms in 2012, after an anticipated 7.7% drop in 2011 due to the political and security turmoil that followed the December 2010 presidential elections. BMI does, however, warn that there are severe downside risks to BMI's view. Private sector will be particularly wary about whether Ouattara can maintain political stability and head off potential challenges to his administration. Meanwhile, risks of sudden and unpredictable violent episodes remain high.
Thanks to its poor score in both the Rewards and the Risks categories, Côte d’Ivoire remains rooted to the bottom of BMI's regional Business Environment Ratings. The country scores a total 24.9 points this quarter, performing significantly worse than the regional average of 47.6 points. The country scores very poorly both for the Rewards category and the Risks category. There is a significant gap in terms of points between Côte d’Ivoire and the two countries that are ranked immediately above it. Consequently it would take a considerable improvement across a range of sub-categories for the country to move off the bottom of BMI's league table.
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