Côte d’Ivoire

The recovery of the Ivorian economy continued in 2009, despite the context of international crisis. Growth reached 3.6% in 2009 and inflation fell, thanks to good supply conditions on the local market and a thaw in international prices. The reunification of the country, uniting former rebel areas in the Centre-Northwest zone with the regions controlled by the regular army, helped to soften the shock of the economic crisis. The country has restored relations with its donors and has adopted a prudent budgetary stance. Other positive factors had an effect in 2009, such as ample rainfall and the favourable trend in coffee, cocoa and oil prices. The recovery should continue in 2010 if the often-postponed presidential and legislative elections take place peacefully. If this is the case, growth should continue to rise to 3.9% in 2010 and 4.5% in 2011.

As investment in industry contracted during the crisis, oil extraction and telecommunications became the principal drivers of growth. According to the World Bank’s Doing Business report, Côte d’Ivoire’s ranking improved in 2009, gaining five places over 2008. The country remains in the 20 bottom countries, however, ranking 163rd out of 183 countries. In agriculture, cash crops (coffee, cocoa, palm oil, rubber, mahogany and sugar) benefited from the good weather conditions of 2008-09 and from the securing of borders. The recession left the cocoa market untouched, and prices remained strong, leading to better tax receipts.

The reunification of the country has not been entirely positive, as it complicates public resource mobilisation. The tax administration exerts great pressure, while the available tax base tends to be overstretched. Other reasons for poor tax collection are the size of the informal economy and the lack of tax compliance. Tax evasion results in an annual revenue loss of around 120 billion CFA Franc BCEAO (XOF) for the state. The authorities are therefore pursuing a policy aimed at widening the tax base and improving tax yields. Reforms of business licensing tax, income tax, property tax and value added tax (VAT) have been launched. They aim at simplifying tax declarations, giving greater weight to domestic taxes relative to customs levies, and optimising taxes on the oil and informal sectors. The objective is to increase the tax base before 2011 to the West African Economic and Monetary Union (WAEMU) standard of 17% of GDP.

After several postponements, which the authorities have blamed on technical problems linked to the electoral census, legislative and presidential elections were rescheduled for November 2009. Once again, however, the elections could not be held on this date, despite the fact that the normalisation of the political and security situation depends on these elections going smoothly.

In 2009, Côte d’Ivoire’s nominal gross domestic product (GDP) reached XOF 10.925 billion, up from XOF 10.425 billion in 2008. The real growth rate rose to 3.6% in 2009, against 2.3% in 2008. Growth was led by agriculture (up by 5.9%) and services (3.6%). Food production, mining (oil, gas and gold), transportation and telecommunications were the most dynamic sectors. In contrast, three sectors in recession impeded growth: forestry (down by 4% in 2009), manufacturing (down 4.5%) and, to a lesser extent, construction (down 1.8%). As investment in industry contracted during the crisis, oil extraction and telecommunications became the principal drivers of growth.

In agriculture, cash crops (coffee, cocoa, palm oil, rubber, mahogany and sugar) benefited from the good weather conditions of 2008-09 and from the securing of borders. The recession left the cocoa market untouched, and prices remained strong, leading to better tax receipts. Cocoa production increased by 13.6%, rising from 1.15 million tonnes in the 2008-09 harvest to 1.31 million in 2009-10. Thanks to stable markets, export revenues increased, despite a drop in export volume arising from quality problems. Ageing groves and the persistence of diseases such as “brown rot” could undermine exports. The coffee sector has experienced a quite different fate, as it has been abandoned by planters following the fall in world prices. Coffee production should fall by 6% in 2010. Despite these difficulties, Côte d’Ivoire remains the largest cocoa producer in the world and the largest producer of coffee in Africa. The restructuring, modernising and transparency measures currently being implemented in the coffee and cocoa sector could bear fruit by 2011.

The banana and pineapple industries are suffering from competition with Latin American producers. The number of banana farmers has dropped sharply, falling from 3 000 in 2001-02 to 250 in 2008-09, because of low prices for Ivorian bananas. The sector’s structural problems — rural land security, organisational inadequacies and low levels of mechanisation — have not helped. The planters who abandoned bananas have turned to rubber and palm oil, which have more attractive producer prices. Rubber and palm oil production should grow by 10.1% and 3.5% respectively in 2010.

Cotton has suffered similar setbacks, on account of the destruction of high-quality seeds in research centres in the former Centre-Northwest rebel area. The sector is grappling with financing difficulties and the fall of world prices. Annual production of cotton has contracted by 14.5% on average since 2006. Production of cashews, the second-largest cash crop in the former rebel zone, has been boosted since 2006 by demand from India, but will register a slight fall in 2009 and 2010 (down by 2% and 0.7%).

Industrial activity contracted by 0.8% in 2009, after having grown by 3.7% in 2008, despite the good performance of food processing, up by 17.6% in 2009 largely as a result of strong agricultural output and to a higher proportion of domestic processing of the coffee and cocoa harvest. The slowdown in execution of major public works projects in 2009 had a negative effect on the construction, building materials and chemicals sub-sectors.

Mining performed quite well in 2009, with the resumption of production at the Baobab field after problems of sand silting. Oil production increased from 16.52 million barrels in 2008 to 18.61 million in 2009, a rise of 12.7%. The increase should be limited to 6.1% in 2010. Gold mines benefited from private sector investment. Gold production more than doubled between 2008 and 2009, from 2.88 to 6.55 tonnes, with 7.21 tonnes forecast for 2010. These results, obtained in a context of rising gold prices, should increase the share contributed by ores to the sub-sector.

Power generation capacity remains insufficient to meet demand. A slowdown was observed in 2009 due to the drop in production of gas, which is used to fire thermal power plants. In 2010, electricity supply should remain insufficient because of problems in the Azito thermal plant. Power outages are expected, with negative effects for industry and services.

The tertiary sector remained stable, posting 3.7% growth in 2009 (3.6% in 2008), with projected growth of 4.1% in 2010. The trade sub-sector was hurt by sluggish domestic demand, although the robust telecommunications and transport sectors compensated. Because of the fall in retail trade, commercial margins increased by only 1.1% in real terms in 2009, despite the good performance of goods exports. The telecommunications sector remains highly dynamic with a growth rate of 9% in 2009 and 2010, thanks to the growth of mobile activities (a new mobile provider entered the market in 2009). Transport also experienced growth of 5.9% in 2009, with projected expansion of 5.4% in 2010, thanks to the dynamism of sea transport.

Demand growth was driven primarily by the recovery of foreign trade. Overall final consumption recorded a drop of 0.9%, mostly due to the contraction in public spending and a slowing of household consumption. Public consumption should increase in 2010 with the organisation of elections. The clearing of domestic arrears, begun in 2009, will have a substantial effect on the private sector and on household disposable income. The good results of the agricultural sector, particularly food production, should boost household consumption. As a result, final consumption should rebound in 2010, rising by 3.6%.

Gross fixed capital formation in the private sector rose by 12.7% in 2009, owing to investments in mining and increased imports of capital goods. In the public sector, the slowing of major infrastructure projects resulted in only a slight rise in investment (1% in 2009). Overall, the investment rate will not exceed 10.9% of GDP, a very low level compared with the other WAEMU countries. It should increase to 12.8% of GDP in 2010.

Exports should increase by 5.9% in 2009 and 4% in 2010. External demand concerns the main food products (cocoa and cashew nuts), extraction (crude oil and gold) and rubber. Imports fell by 1.3% in 2009, compared with a rise of 2.4% in 2008. This contraction is chiefly due to weak household consumption and a fall in retail trade, which were partly offset by the increase in imports of capital goods. A growth trend could be observed in 2010, with imports of consumer goods and capital goods rising by 2.4% and 6.4% respectively.

 

Following the satisfactory implementation of an emergency post-conflict assistance project in 2007 and 2008, the government in March 2009 concluded a Poverty Reduction and Growth Facility (PRGF) to support its economic reforms and poverty reduction strategy. The first review of the PRGF, carried out by the International Monetary Fund (IMF) in September 2009, deemed the country's macroeconomic performance to be satisfactory. The second tranche of the PRGF was subsequently disbursed in November 2009 to step up implementation of the reforms set out in the programme. The authorities have identified four key priorities: acceleration of structural reforms in order to remove obstacles to growth and improve the business environment; better mobilisation of fiscal resources to combat poverty and rehabilitate infrastructure destroyed during Côte d’Ivoire's political crisis; finding solutions to the weakness of the financial system; and restructuring the debt and reinforcing competitiveness.

Since the country emerged from the crisis, its fiscal policy has been directed towards rebuilding the confidence necessary for growth and private sector development. Fiscal management is part of the effort to improve public finances and transparency, through the implementation of an action plan formulated following a public expenditure management and financial accountability review (PEMFAR) in 2007.

Total revenue excluding grants amounted to 18.5% of GDP in 2009, or XOF 2 025 billion, almost the same level as 2008 (18.6% of GDP and XOF 1 987 billion). The results for tax and customs revenue are mixed. Tax revenue exceeded its target by more than 1.2% of GDP, thanks to four factors: better collection of key taxes, increased oil production, the maintenance of cocoa registration duty at 10% and reform of the tax administration. Customs revenue, in contrast, fell by 0.6% of GDP, owing to the decline in imports. The composition of expenditure improved, although there is still room for progress. Primary expenditure amounted to 0.7% of GDP in 2009. In terms of current spending, the wage bill conformed to its target. The electricity sector subsidy, which is financed by forgoing a portion of natural gas revenue, exceeded the forecast amount for 2009 of 0.3% of GDP. Investment expenditure, particularly in relation to public works projects, remained within budget, as the government restricted itself to the XOF 40 billion allocated for this item.

The overall fiscal balance showed a surplus of 1.1% of GDP in 2009, attesting to prudent fiscal management. In 2010, however, the level of revenue (projected at 19.2% of GDP) will likely be outstripped by the level of spending, which should increase to 21.1% of GDP owing to the elections. As a result, the overall deficit should rise to 1.9% of GDP in 2010.

Monetary policy continues to be directed from the regional level. Côte d’Ivoire is a member of WAEMU, and as such, its monetary and credit policy is conducted by the Central Bank of West African States (BCEAO), linked to the French Treasury via an operational account under the monetary co-operation agreement between France and the WAEMU countries. The currency has a fixed parity with the euro (EUR 1 is worth XOF 655.957). The government participates in the regional management of liquidity, as stipulated by WAEMU. It plans its securities issues on regional financial and monetary markets in accordance with its budget financing needs.

In 2009, broad money grew by 18.9%, compared with 5.6% in 2008. This increase was due to the strong rise in currency in circulation (20.8%) and in bank deposits (17.4%). Credit to the economy rose by 12.1% between 2008 and 2009. Net external assets also grew by 20.6% in 2009, stimulated by the rise in the BCEAO’s external assets and by drawdowns under the PRGF and an additional allocation of special drawing rights from the IMF, to help the country deal with domestic arrears.

At the end of 2008, the ten largest borrowers from banks accounted for 22% of loans granted. In several cases, the restrictions on loan limits between associated parties were not observed. The government therefore took steps to restructure and recapitalise banks, following the recommendations of the WAEMU banking commission. The authorities continued their close monitoring of banks and financial institutions that had drawn the banking commission's fire.

Inflation soared in 2008 with the rise in food prices. In 2009, however, it was held below the 3% mark, a level set out in the WAEMU convergence criteria, and a similar moderate level is projected for 2010. After a strong rise in early 2009, inflation declined owing to the drop in food prices. Thanks to good weather conditions, the harvest produced an ample supply of subsistence goods for local markets. The automatic adjustment mechanism for fuel prices, introduced in April 2009, had little effect on inflation given the strong decrease in food prices.

The trade balance remained positive in 2008 and 2009, thanks to cocoa production, a 30% rise in cocoa export prices and a rise in oil prices. Côte d’Ivoire’s two main exports (cocoa and oil products) accounted for almost 58% of the value of all goods exported in 2008 and 57.7% in 2009. In an environment marred by ongoing political uncertainty and low confidence, the IMF expects an outflow of private capital. Foreign companies will repatriate their earnings instead of investing them, while domestic exporters will repatriate only a part of their revenue. At the end of 2010, the current account should show a deficit of 7% of GDP, attributable to a fall in volume exports of oil and cocoa.

On the regional and international fronts, the country remains involved in institutions such as WAEMU, the Economic Community of West African States (ECOWAS) and the World Trade Organization. ECOWAS has decided to introduce a fifth tariff band of 35% in the structure of the common external tariff. It remains to be determined which products will fall into this band; the Ivorian authorities are working on the list. An interim economic partnership agreement was signed in 2009 with the European Union (EU). In terms of support measures, the programme of assistance for trade and regional integration is being carried out satisfactorily. Côte d’Ivoire’s external debt was estimated at 13.3 billion US dollars (USD) at the end of 2008 (61% of GDP), of which USD 5 billion consists of arrears (including accrued interest and penalties). Around 25% of this debt is owed to multilateral creditors, 52% to the Paris Club, 1% to non-Paris Club bilateral donors and 22% to commercial creditors (short-term debt).

In March 2009, the country obtained clearance of its arrears to the African Development Bank (AfDB). Substantial progress was made after Côte d’Ivoire reached the decision point of the Heavily Indebted Poor Countries (HIPC) Initiative in March 2009. A restructuring agreement with the Paris Club was concluded in May 2009 under the so-called Cologne terms. Negotiations with the London Club led to the signing of a preliminary agreement on 29 September 2009. An agreement restructuring arrears to the European Investment Bank was concluded on 19 May 2009.

On 31 March 2009, the United States cancelled XOF 98.4 billion (USD 208.7 million) of Côte d’Ivoire’s debt arrears, out of an estimated total of XOF 99.2 billion. In December 2009, France also forgave XOF 205 billion of Ivorian debt and rescheduled the payment of XOF 314 billion in arrears.

According to the World Bank’s Doing Business report, Côte d’Ivoire’s ranking improved in 2009, gaining five places over 2008. The country remains in the 20 bottom countries, however, ranking 163rd out of 183 countries. Indicators on the business environment put Côte d’Ivoire amongst the least competitive countries, far behind the African and West African averages. Financial intermediation is poor, private sector credit has plateaued at 13% of GDP (against a 36% average for sub-Saharan Africa) and foreign direct investment (FDI) represents just 2% of GDP. Private sector development is subject to serious constraints: cumbersome administrative procedures; the lack of a framework law on small and medium-sized enterprises (SMEs); the fact that the supply of education and training does not match the needs of business; police racketeering of travellers and hauliers; and the resurgence of fraud, corruption and smuggling. The private sector continues to suffer from tight credit and insufficient long-term savings. However, the government reduced its debt towards the domestic private sector in 2009.

The government has launched reforms aimed at re-establishing business confidence and accelerating growth and investment. In 2009, it formulated a national good governance and anti-corruption plan. A sweeping reform of the coffee and cocoa sectors is under way. A modernisation programme is being prepared to increase oil production and develop the traditional industries of rubber, wood and food. A reform of the justice sector is also on the agenda.

The system of public finance management was reformed in 2009, with a view to greater transparency. Implementation of an action plan stemming from the 2007 PEMFAR began in 2009. This plan pursues two strategic goals: improving the judicial and institutional framework of public finance management and increasing transparency in public finance management and procurement.

Some efforts have been made to make the budget more comprehensive and credible and to improve the quality of spending. The aim of lifting total revenue in 2009 to a minimum of 95% of the revenue estimate in the initially approved budget is within reach. A preliminary report on the identification of revenue collected by the ministries is available, and an inventory of ministries’ off-budget revenue from services is in progress. No fewer than 20 of 34 ministries were visited. The government established around 15 tax offices to capture the revenue identified for these 20 ministries. The interface between the expenditure tracking software (SIGFIP) and the budget accounting software (ASTER) is now operational, improving management of spending and treasury operations.

Medium-Term Expenditure Frameworks (MTEFs) are being prepared for the Education and Health ministries. Beginning with the 2011 budget, they will be introduced gradually to help redirect spending to benefit the poor. Better control of public finances was reflected by the larger number of audits or assessments of large public enterprises (14 in 2009 compared with 11 in 2008), as well as in the September 2009 launch of audits of the self-financed expenditure of the 2006-08 crisis recovery programme. In addition, draft spending bills for the 2005, 2006 and 2007 budgets were submitted to the Chamber of Accounts, after some delay. The 2007 draft bill was transmitted in February 2009 and that of 2008 in October 2009. Lastly, the bill to create a state audit office (Cour des comptes) is in the process of being adopted.

Where public procurement is concerned, a new code in line with WAEMU directives came into effect in 2009. Since February 2009, calls for tender for public contracts have been published on a website and in the bulletin of the national public procurement department (Direction nationale des marchés publics). The framework agreements that remain in effect for large public works will be converted into contracts conforming to the new public procurement code. A public procurement regulator (Autorité nationale de régulation des marchés publics) was established.

In the financial sector, current reforms aim to reduce factors of vulnerability and to clarify the role of government. Specifically, they focus on reinforcing prudential regulations and the supervisory framework (amendments to the banking law and the law against terrorist financing, and support to the WAEMU banking commission). The objective is to respect minimum reserves norms and to continue monitoring those banks against which the banking commission issued injunctions. Lastly, the reforms aim to restructure and recapitalise troubled retail banks without injecting budgetary resources.

Reform of the civil service and public administration has begun. A census of the public workforce should enable the government to clean up the civil service records in 2010. The official retirement age for the civil service rose from 55 to 57 years on 1 January 2009 and should rise further to 60 years for all government employees starting in 2011, although certain categories might be excluded. A ministerial council meeting on 6 August 2009 approved actuarial, judicial and institutional studies of the civil service pension fund (CGRAE). Based on these studies, a plan to restructure the CGRAE was drawn up, aimed at strengthening it institutionally and introducing a funded retirement scheme.

Stepped-up monitoring of public enterprises brought gradual improvement in performance, with a view to restructuring and privatisation.

Reforms in the coffee and cocoa sector were continued and stepped up in 2009 in order to boost producer incomes and improve transparency in the use of public resources. The 2009 and 2010 budgets took into account the rural investment fund (Fonds d’investissement en milieu rural), so that quasi-tax revenue from coffee and cocoa investments and the reduction of quasi-taxation of cocoa would be included in the budget. The government reduced the registration duty to 5% as from the 2009/10 harvest, compared with 10% in 2008/09. The export tax was lowered to XOF 210 per kilogram (kg), compared with XOF 220 previously. Quasi-taxes were cut by XOF 5 per kg during the 2009/10 campaign, bringing them to XOF 26.26 per kg. Preparations for an ad valorem tax are continuing. Tracking of the resources allocated to the coffee and cocoa sector has been improved. Since June 2009, these resources have been reported in ministerial council meetings.

In energy, an independent auditor completed the 2006 and 2007 reports, fulfilling the requirements of the Extractive Industries Transparency Initiative (EITI). The 2008 report should be finalised before the end of September 2010 and that of 2009 launched in 2010. In the electricity sector, a stakeholder consultation has begun and should lead to renegotiation of the prices that the three main operators pay for gas to fire their power plants, as well as to a review of the electricity tariff structure.

The new dynamism of Côte d’Ivoire’s tax system dates from 1996, the year of the first WAEMU community fiscal measures, which led to the Ivorian tax system being simplified and harmonised with WAEMU regulations. A relative increase in the level of public resource mobilisation resulted, but this trend was checked by the political crisis of 2002, which split the country in two.

From 1999 to 2009, fiscal revenue increased by XOF 722.3 billion (8.3% of average GDP), or an annual average increase of 6.1%. This trend was due to the widening of the tax base, increased auditing and enforcement measures (with the introduction of standardised billing and measures to combat tax evasion). Performance during the 2002-06 period was poor, however, as a result of the crisis and the division of the country. In the medium term, better results are expected in terms of collection, aided by the reforms introduced under the PRGF. Revenue collection should increase by 12%, with a large proportion coming from coffee and cocoa registration duty, income tax, business profits tax and VAT. Non-fiscal revenue (including grants) increased by XOF 316 billion, or 3.6% of annual average GDP, over the 1999-2009 period, but this growth was highly variable, as such revenue increased greatly between 2007 and 2009 with the resumption of international financial aid, which had been suspended in 2002. The average rate of increase in non-fiscal revenue was 2.4% a year from 1999 to 2005 and 18.1% a year as from 2007. Tax revenue accounts for about 82% of total revenue and grants, non-fiscal revenue for 13% and grants for 5%. The performance of tax revenue may be attributed to the good yield of the principal taxes. Since 2006, tax collection has exceeded the tax authorities’ targets.

The legislative framework of Côte d’Ivoire’s fiscal policy is defined by the general tax code, the tax procedures handbook and other laws and regulations, such as the oil and investment codes and fiscal annexes to the budget act. According to the World Bank report on the business environment, tax legislation is not one of the leading obstacles to investment. The government adopts a central budget each year, the fiscal annex of which sets out new measures to be applied. These legislative measures may be supplemented by implementing instruments.

On average, direct taxes account for 27.8% of tax revenue and 4.2% of GDP. Customs revenue contributes 31.5% (imports) and 19.6% (exports) to tax revenue (4.8% and 3% of GDP respectively). 

The tax rate varies with the nature of the tax. For taxes on business profits and agricultural income, the rates of 20% and 25% are applied respectively to individuals and companies. General income tax is progressive by income bracket, with two different scales depending on whether the income is salaried or not. There are a number of investment incentive measures for priority sectors such as agriculture, extractive industries and energy production, manufacturing, health and education. In the oil sector, the general tax code provides, among other things, for an exemption from registration duty in relation to loans, loan guarantees and contracts directly linked to oil production. However, the political crisis checked the growth in the number of taxpayers paying business taxes, which rose by less than 4% between 2000 and 2005. Since 2007, with the improving security situation, more effective tax census tools and the broadening of the tax base, the number of taxpayers has increased by an annual average of 12.6%. The fiscal policies adopted from 2001 to 2009 sought to support the economy and the private sector, strengthen ways and means of mobilising public resources and ensure revenue security, while mitigating the impact of the political crisis. The main tax reforms addressed the contribution of business licensing tax, general income tax, property taxes and VAT. Other measures are being considered to simplify the declaration process and improve taxation of agriculture, particularly through giving greater weight to domestic taxes relative to export duty. These measures also seek to increase the tax yield from the oil sector and to tax the informal sector more effectively.

The reform of general income tax, launched in 2007 and continued in 2009, has involved reorganisation of the base, rate structure and means of payment of this tax. For taxes on business and agricultural profits, the rate was reduced from 35% to 27% in 2006 to support the economic recovery. In 2007, property tax was replaced by a tax on property income and another on property wealth. Regarding VAT, the only measures taken in recent years have been adjustments to the existing rates.

The institutional and administrative structure of Côte d’Ivoire’s tax authority (the DGI) is determined by Decree 2007-468 of 15 May 2007, which sets out the organisation of the Ministry of Economy and Finance and the organisation chart of the DGI. The Ministry of Economy and Finance is responsible for technical oversight of the DGI, and the Ministry of Civil Service for administrative oversight. The DGI is involved in policy design, as it is responsible for carrying out the studies and collecting the data required for formulating tax policy. There is no one-stop shop for customs clearance, with the exception of coffee and cocoa exports and vehicle imports. The structure of the DGI is based on decentralised departments with geographic jurisdiction.

Côte d’Ivoire has no plans as yet to create a department responsible for the taxation of SMEs, but there is a national department for large enterprises, responsible for all companies with turnover in excess of XOF 1 billion. A process of decentralising departments and powers is under way, involving the creation of specialised and general tax departments in different parts of the country, and the retrocession to local authorities of part of the tax revenue collected in their area. The tax system does not allow for electronic filing of tax returns. Only a procedure for consulting the land registry via the Internet is planned. However, remote electronic procedures are being gradually introduced into the administrative system.

The principal problems involved in increasing tax revenue are the overexploitation of the available tax base and strong administrative pressure from tax departments. The low level of compliance with tax obligations is due both to the size of the informal sector and to the absence of fiscal civic-mindedness. The recent reforms have widened the tax base and improved the distribution of the tax burden. Preferential measures have been strictly reserved for priority sectors and for those that suffered especially from the crisis of 2002. In addition, the general tax code is now accessible to all since its overhaul in 2005.

The reforms implemented to broaden the tax base include at-source collection of taxes on informal sector transactions and the creation of certified management centres, designed to assist small businesses with accounting, legal and tax management. Initiatives are under way to improve communication with the public on tax matters. Extensive campaigns on fiscal civic-mindedness have been conducted, with giant publicity hoardings erected on main urban arteries and broadcasts on radio and television.

A DGI study puts the state’s annual revenue loss due to tax evasion at around XOF 120 billion. Measures taken to combat tax evasion in recent years have increased the yield from the taxes traditionally targeted by fraud, notably VAT. Several steps have been taken to boost these revenues, the effects of which should be felt in 2010 and 2011. The customs and tax administrations have been reinforced, and collection should increase with the coverage of former rebel areas in the Centre-Northwest zone. Tax exemptions on rice adopted in 2008 following the food crisis have been eliminated, while the supplementary income tax for reconstruction purposes will be reintroduced.

Côte d’Ivoire has made great efforts to overcome its low level of public resource mobilisation. Much remains to be done, however, in terms of adapting tax rules to the circumstances of taxpayers (households and companies) and of managing the fiscal transition. The DGI, because of its dominant role in mobilising domestic revenue, will have to implement and enforce all of the planned reforms in order to maximise public revenue. The stated objective is to raise tax pressure to the WAEMU standard of 17% before 2011. The strategy for doing so involves identifying all of the constituent elements of the tax and customs base. It is also necessary to identify all quasi-fiscal revenue.

After several postponements, which the authorities have blamed on technical problems linked to the electoral census, legislative and presidential elections were rescheduled for November 2009. Once again, however, the elections could not be held on this date, despite the fact that the normalisation of the political and security situation depends on these elections going smoothly.

That said, some progress was made in 2009 thanks to the engagement of a mediator on the political crisis of 2002, the determination shown by stakeholders and the support of the international community. A new Integrated Command Centre (CCI) became operational in 2009, with the formation of six mixed brigades and the deployment of 500 Security and Defence Forces soldiers in Bouaké and 100 New Forces (ex-rebel) soldiers in Abidjan. The 2 025 demobilised former combatants are in reintegration programmes. Around 38 000 members of militias and self-defence groups have been identified by the CCI and the National Reconstruction and Reintegration Programme (PNRR). The restoration of government authority continued in 2009 with the redeployment of the administration throughout the country and the rehabilitation of public buildings in the Centre-Northwest zone. The transfer of power between the ex-rebel zone commanders and the prefectoral administration took place in Bouaké in May 2009. The requirement of having a laisser-passer in the Centre-Northwest zone has been suspended and a programme to aid the return of displaced persons has been drawn up.

The process of voter identification has been much delayed, with the duration of the operation being extended five times. The Independent Electoral Commission (CNI) is facing a number of challenges. In December 2009, the Constitutional Court approved 14 candidates for the presidential election. Computerised data concerning newly registered voters on the electoral lists were compared with the old lists. Once these data were processed, a provisional voter list was posted. The registration of 5.35 million new voters was approved, while 1.03 million potential new voters were requested to clarify their status. In 2010, free and fair elections are supposed to consolidate peace and improve the country’s security situation, which is indispensable for sustainable economic development. However, on 12 February 2010, the president dissolved the government and the CNI, an organisation that he had accused of fraud several weeks before. This move has heightened the political risk facing Côte d’Ivoire.

In 2009, medical personnel and court clerks went on strike for three weeks. These strikes paralysed the health and justice systems, which were already weakened by the years of crisis.

The long period of political instability has had negative consequences for governance. The perceived level of corruption improved only marginally in 2009: the Transparency International corruption perceptions index rated the country at 2.1 on a scale of 10 in 2009, the same level as in 2007. This situation confirms that corruption remains a major obstacle to doing business. To create a more favourable environment for business and poverty reduction, the Ivorian authorities, with the support of the AfDB and the EU, drew up a national good governance and anti-corruption plan in 2009 spanning the 2010-14 period.

Poverty in Côte d’Ivoire has increased as a result of the political crisis. In the Human Development Index, Côte d’Ivoire fell from 154th place in 1999 (out of 174 countries) to 163rd place in 2009 (out of 182 countries). GDP per capita has declined and basic social services have deteriorated, particularly in the Centre-Northwest zone.

The poverty rate has increased strongly, from 36.8% in 2002 to 48.9% in 2008. Poverty is more pronounced in rural areas, where it reached 62.4% in 2008, against 49% in 2002. The urban poverty rate is 29.4%. There are also great inequalities in income distribution, with the richest 10% garnering one-third (32.8%) of total income. The minimum food needs of around 40% of the population are not met.

The education system is comprised of four levels of instruction: preschool, primary, secondary and higher. In general, the enrolment rate for preschool education is very low, not exceeding 13% in urban areas and 1% in rural ones. The situation in primary education is also poor: only 44% of school-age children have access to the first year of primary school, with a very substantial discrepancy between urban (69%) and rural (20%) areas. The quality of primary education has deteriorated substantially, due to the shortage of qualified teachers. The education system is characterised by high repetition and dropout rates. Frequent teacher strikes as well as persistent security problems in some areas prevent many children from attending school normally.

The net primary school enrolment rate for girls was 53.1% in 2008, versus 58.8% for boys. Gender inequalities persist in access to basic social services, jobs, decision making and participation in public and political life. Only 8.7% of parliamentary seats are occupied by women.

According to the latest surveys carried out under the Poverty Reduction Strategy, unemployment has increased. In fact, it has more than doubled in six years, rising from 6.4% in 2002 to 15.7% in 2008. Youth unemployment is even greater, reaching 24.2% in 2008 for 15-24 year olds and 17.5% for 25-34 year olds. Unemployment affects women (19.8%) more than men (12.1%), and is higher in urban areas (27.4%) than in rural areas (8.7%). In Abidjan, the capital, unemployment peaks at 33.2%.

The infant mortality rate fell slightly in 2009, at 68.06 per 1 000 live births compared with 69.76 per 1 000 births in 2008.

The HIV/AIDS situation remains worrying. The 15-49 year old age group, which is the most dynamic segment of the population, is most affected, with a prevalence rate of 3.9%. According to a 2008 UNAIDS report, about 480 000 people in Côte d’Ivoire are infected by HIV, of whom 190 000 are entitled to antiretroviral treatment. Among those ill with the disease, 38% (71 833 people) had access to treatment in 2007, against just 2 473 people in 2003 and 17 404 in 2005. Access to treatment should increase even further, thanks to the introduction of free medication in 2009 and an intense effort of social mobilisation. The country recorded 38 000 deaths due to HIV/AIDS in 2007, and 420 000 children have been orphaned and rendered vulnerable by the pandemic. Tuberculosis is the most common opportunistic infection associated with HIV/AIDS in Côte d’Ivoire. Among those infected with tuberculosis in Abidjan, 50% are HIV-positive. The Ministry for the Fight against AIDS raised about XOF 95 billion between 2006 and 2009, 87.2% of which come from international funds.