Ivory Coast plans to steam ahead with a post-war strategy of fostering economic growth through heavy infrastructure investments, the budget minister said, claiming the resulting increased debt load remains sustainable.
Following the end of a decade-long crisis that ended in 2011, the government, under the stewardship of President Alassane Ouattara has spent billions of dollars to overhaul the power sector and build highways and bridges.
Abdourahmane Cisse said after years of neglect Ivory Coast is now making up for lost time and working hard to attract investors to revitalise French-speaking West Africa’s largest economy.
“If you look at the budget in 2010, the percentage that was affected to infrastructure was 15 percent. In 2015, it’s about a third of the budget,” he told Reuters. “We firmly believe that growth will come from the return on investments that we are doing.” Economic growth has averaged around 9 percent since 2012. And while investors are starting to take notice, much of the improvements aimed at drawing them to Ivory Coast are being financed through debt.
A raft of African sovereign issuances has raised concerns, including from the International Monetary Fund, that some countries may be taking on debt they will struggle to pay back.
Ivory Coast issued a $750 million Eurobond last year and another for $1 billion earlier this year. It has plans to issue its first sukuk of around 150 billion CFA francs ($251 million)later in 2015 as part of plans to raise an additional $1.1 billion before the end of the year.
On Monday, Cisse said the government had recently signed an $800 million loan deal with China Eximbank to fund upgrades to the port in its commercial capital Abidjan.