IVORY COAST/FILE: IMF says growth in West Africa expected to be dampened by recent unrets in region

Record ID: 182206

  • Title: IVORY COAST/FILE: IMF says growth in West Africa expected to be dampened by recent unrets in region
  • Date: 25th May 2012
  • Summary: ABIDJAN, IVORY COAST (MAY 24, 2012) (REUTERS) (SOUNDBITE) (English) ROGER NORD DEPUTY DIRECTOR OF IMF'S AFRICAN DEPARTEMENT SAYING: "Unfortunately, the locomotive role that Cote d'Ivoire can now start playing is at least partially offset by the renewed conflict in Mali and in Guinea Bissau." VARIOUS OF WORKERS ON NEW BRIDGE (SOUNDBITE) (English) ROGER NORD DEPUTY DIRECTOR OF IMF'S AFRICAN DEPARTEMENT SAYING "The potential is enormous. Just as we said over those ten years that Cote d'Ivoire was a drag on the West African Economic and Monetary Union, now it has the potential of becoming a locomotive." VARIOUS MORE OF ABIDJAN (SOUNDBITE) (English) ROGER NORD DEPUTY DIRECTOR OF IMF'S AFRICAN DEPARTEMENT SAYING: ' The ambitions, both here in Cote d'Ivoire and also the new administration in Senegal, is to ramp up growth. How quickly will that happen? Maybe that won't be happening in 2012, but 2013 and 2014, with good policies in Cote d'Ivoire and Senegal, which account for the bulk of the regional economy, I think there is a strong possibility that we will see strong growth going forward." MORE OF WORKERS ON NEW BRIDGE
  • Embargoed: 9th June 2012 13:00
  • Keywords:
  • Location: Cote d'Ivoire
  • Country: Ivory Coast
  • Topics: Conflict,International Relations,Economy
  • Reuters ID: LVACBXFDQNLKSWTWXD4RAUB29Q6O
  • Story Text: A robust growth forecast for the West African Economic and Monetary Union will likely be dampened by new political turmoil in the region despite to a post-war revival in Ivory Coast, a top International Monetary Fund official said on Thursday (May 24).
    Ivory Coast, the dominant economy in the eight-country bloc, is emerging from a decade-long political crisis that led to economic stagnation in the world's top cocoa producer. The crisis ended last year after a brief civil war that left some 3,000 dead and saw the economy shrink by 4.7 percent for 2011.
    An economic turn-around fueled by billions of dollars in donor support and heavy investment in large public works projects is currently underway, however, and the IMF is forecasting 2012 growth at over 8 percent. That growth had been expected to buoy the outlook for the economic union as a whole.
    "Given the strong growth in Cote d'Ivoire, we expected growth to be somewhere around 6 percent or so, maybe even a touch higher...2012 was shaping up to be a very good year," Roger Nord, deputy director of the Fund's African department said in an interview.
    "Unfortunately, the locomotive role that Cote d'Ivoire can now start playing is at least partially offset by the renewed conflict in Mali and in Guinea Bissau," he said.
    Mutinous soldiers toppled the government in Mali on March 22, unintentionally paving the way for rebels to capture the country's north. Efforts by regional neighbours to broker a deal to reinstate a civilian government in the capital, Bamako, have met with repeated setbacks.
    The military took control in tiny, coup-plagued Guinea Bissau during an overnight putsch just weeks later. And while power was handed back to civilian authorities at the weekend, disagreements remain over how the post-coup transition should be handled.
    The political instability is expected to have grave consequences for the economies of the two countries. And the unrest, particularly in Mali where growth was already seen as falling close to zero this year due to a prolonged drought, is likely to weaken the forecast for the economic bloc as a whole.
    Growth in the bloc, known by its French acronym UEMOA, fell from 4.6 percent in 2010 to just 1.3 percent last year largely as a result of the contraction in Ivory Coast created by the war there. So even with a slight downgrading of its forecast due to the duel crises, it is likely to experience relatively healthy growth in 2012.
    The Ivorian economic turnaround that has helped fuel renewed optimism will likely get a further boost next month when a decision is expected on an IMF-backed debt relief deal. The plan calls for relief of $5 billion of the country's debt, reducing its current stock of debt by 40 percent.
    "The potential is enormous. Just as we said over those ten years that Cote d'Ivoire was a drag on the West African Economic and Monetary Union, now it has the potential of becoming a locomotive." Nord said.
    On top of the Ivorian recovery, UEMOA is also set to feel the benefits of a burgeoning oil sector in Niger and new leadership in its other main economy, Senegal.
    "The ambitions, both here in Cote d'Ivoire and also the new administration in Senegal, is to ramp up growth," said Nord.
    "Maybe that won't be happening in 2012, but 2013 and 2014, with good policies in Cote d'Ivoire and Senegal, which account for the bulk of the regional economy, I think there is a strong possibility that we will see strong growth going forward."
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