The short- and medium-term outlook for the Ivorian economy remains positive and is expected to maintain a steady trajectory, with GDP growth of 7 to 7.5% in the coming years amid climate change effects.
This is according to the Economic Update for Côte d’Ivoire, prepared by the World Bank, which is titled So Tomorrow Never Dies: Côte d’Ivoire and Climate Change.
The report highlights the urgent need to implement measures to ensure that climate change impacts do not imperil this economic progress and plunge millions of Ivorians into poverty.
“The solid performance of the Ivorian economy, which registered growth of almost 8% in 2017, is essentially due to the agricultural sector, which experienced positive climate conditions,” said Jacques Morisset, programme leader for Côte d’Ivoire and lead author of the report.
Morisset pointed out that the economy also benefited from a period of calm after the political and social instability of the first half of 2017 and from more favourable conditions on international markets.
“The government also successfully managed its accounts, with a lower-than-expected deficit of 4.2% of GDP, while continuing its ambitious investment policy, partly financed by a judicious debt policy on financial markets,” he added.
Slow private sector activity
The report also notes that private sector activity slowed in 2017 compared with 2016 and especially 2015, which may curb the pace of growth of the Ivorian economy in the coming years.
The study recommends that against the backdrop of fiscal adjustment projected for 2018 and 2019, it is critical that the private sector remains dynamic and become the main driver of growth.
This is particularly important in light of the uncertainty associated with the upcoming elections in 2020, which could prompt investors to adopt a wait-and-see approach.
As economic growth in Côte d’Ivoire relies in part on the use of its natural resource base, the authors of the report devote a chapter to the impact of climate change on the economy.
They raise an alarming point: the stock of natural resources is believed to have diminished by 26% between 1990 and 2014. Several visible phenomena attest to this degradation, such as deforestation, the depletion of water reserves, and coastal erosion.
Climate change could reduce GDP
According to the Intergovernmental Panel on Climate Change (IPCC), climate change could reduce GDP across Africa by 2% to 4% by 2040 and by 10% to 25% by 2100.
For Côte d’Ivoire, this would correspond to a loss of some CFAF 380 billion ($674 million) to 770 billion ($1,3 billion) in 2040.
“This report sounds an alarm in order to spark a rapid and collective wake-up call,” said Pierre Laporte, World Bank country director for Côte d’Ivoire. “Combating climate change will require prompt decisions and must become a priority for the country to maintain accelerated and sustainable growth over time.”
The report pays special attention to coastal erosion and to the cocoa sector, which represents one-third of the country’s exports and directly affects over five million people.
The Ivorian government, which is already aware of this challenge and has prepared a strategy to confront it, must expedite its implementation. This would have the two-fold effect of developing a “green” economy and creating new jobs.