IRIN Web Special on Cote d’Ivoire crisis

Economy begins to feel the strain

On the economic front, the effects of the crisis are beginning to be felt. “The coping capacity of the economy is beginning to reduce,” one source said. “In Abidjan, families are losing jobs (…) At the family level, more people are being taken in by individual families.

“This is reducing the ability of the families to cope. Within a few weeks, the capacity of many families in Abidjan will break down,” the source predicted.

Cote d’Ivoire is the world’s largest producer of cocoa. Some of the main cocoa-growing areas are close to the frontline and the crisis has led to increases in international cocoa prices.

Hotel occupancy rates have plunged. Bars and restaurants have been feeling the effects of the downturn in visitors coupled with a curfew that begins each night at 19:00 GMT/local time, and ends at 06:00 hours.

The Mouvement des Entreprises de France (MEDEF -French Business Association) complained in November that as a result of the crisis, many small and medium-sized French enterprises in Cote d’Ivoire had suspended their operations while larger ones had cut back. It added that the Ivorian crisis had also had worrying repercussions on French-speaking countries of West Africa and companies based there.

The Ivorian chamber of commerce reported, for its part, that some companies located in, or dependent on raw materials from, the hinterland had had to close their doors temporarily. It said the worst-hit sectors included wood-processing, livestock rearing and especially textiles, in which about 1,000 jobs had been lost to closures. Cotton is grown mostly in the north and official sources have said that, should the crisis persist, some 60,000 cotton farmers could be deprived of their means of livelihood.

Burkina Faso hard hit by Ivorian crisis

The interruption of transport between Cote d’Ivoire and Burkina Faso has led to increases in the prices of meat, most of which comes from northern Cote d’Ivoire or Burkina Faso. It has also deprived Burkina Faso of the largest market for its beef, goats and sheep.

A railway company that operates between the two countries has sent 900 of its 1000 employees in Cote d’Ivoire and 600 in Burkina Faso on technical leave. The company, Sitarail, has been losing an estimated 75 million CFA francs (US $113,000) per day, according to a report in the November-December issue of ‘Navire’, the organ of Cote d’Ivoire’s port and maritime community.

Other companies in Burkina Faso have also been affected. A textile mill that has Cote d'Ivoire as the main market for its cotton thread was forced to lay off 78 out of 164 employees.

The crisis stands to affect Burkina Faso in another way, too. Its nationals in Cote d’Ivoire remit about 80 billion CFA (roughly US $120 million) each year and “if those billions stop coming it will be felt like a economic crisis by the government in the long run,” economist Jacques Gueda noted recently.

Burkina Faso is dependent on Cote d'Ivoire’s ports for 80 percent of its exports and 60 to 70 percent of its imports. The interruption of traffic between the two countries has caused shortages of raw materials such as wheat, latex and iron.

The crisis has forced Burkina Faso to accelerate efforts it began over three years ago to reduce its dependence on Ivorian ports by using the ports of Tema, in Ghana, and Lome, in Togo. As a result of the diversification, the goods traffic between Burkina Faso and Tema increased from 29,670 mt in 1998 to 120,000 mt in the first nine months of 2002, according to the November-December edition of ‘La Lettre Economique du Burkina’ an economic newsletter in Burkina Faso.

When the crisis broke out, about 30,000 mt of Burkinabe goods blocked at Abidjan port had to be rerouted to Lome, Tema and Cotonou (Benin), La Lettre Economique du Burkina quoted the Director-General of a Burkinabe transit company, the SNTBC as saying.

However, re-routing is likely to increase transport costs by 10 to 20 percent, according to some estimates. Burkina Faso’s Chamber of Commerce has asked the government to think of building a new road that would give operators in southwestern Burkina Faso, which includes the economic capital, Bobo Dioulasso, direct access the ports of Tema and Takoradi in Ghana. At present they have to pass through Ouagadougou. Such a move would reduce the distance by about 400 km and also reduce dependency on Cote d’Ivoire, the chamber suggested.

Damage to Ivorian economy would be regional catastrophe

Any damage to Cote d’Ivoire’s economy is “catastrophic for the subregion,” Gueda said. Cote d'Ivoire accounts for 40 percent of the gross domestic product of the countries which make up the Union economique et monetaire ouestafricain (UEMOA - West African Economic and Monetary Union).

Damaging the economy and jeopardising the country’s development is what the war is about, Ivorian government officials have charged. “...The war imposed on Cote d’Ivoire is aimed solely at undermining the bases of its development at a time when the country has put in place an economic recovery plan supported by our development partners,” one state official said recently.

State and ruling party officials have repeatedly pointed a finger at French interests, which they accuse of being alarmed by moves by the government to throw the economy open and end the monopoly some French concerns enjoy in key sectors.

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