Côte d'Ivoire: Financial Sector Profile
Following years of economic stagnation and decline (economic growth averaging -0.4 percent for the 2000-2006 period) predominantly caused by the 2002-03 civil war and subsequent years of stalemate in the peace process, Côte d'Ivoire's economy began to recover following 2007, experiencing an average of 3 percent growth in real GDP in the period 2008-10. However, the economy of Côte D'Ivoire was hard hit by the negative effects of the post-electoral crisis. In 2011 GDP growth declined to -4.7 percent but a gradual recovery is expected in with projected GDP growth at 8.1 and 7.0 percent respectively in 2012 and 2013.
The Ivorian financial sector has remained functional, but has heavily suffered from the political and civil crisis. The cost of risk rose substantially, loan portfolios deteriorated and the banking system became less profitable. The banking system registered an 8 percent drop in healthy loans and a 44% rise in non-performing loans between the end of December 2010 and the end of June 2011.
At last count, the banking sector consisted of 21 banks, five of which were domestic-owned. Domestic banks accounted for 21 percent of total assets and for their great majority liquidity levels remained below prudential levels. The government has been heavily involved in the sector, in an effort to prop up these institutions since the beginning of the conflict in 2002.
Progress has been recently made in restructuring undercapitalized banks and strengthening the banking system. Two of the five domestic banks, which had negative net worth at the end of June 2008, formulated recapitalization plans approved by the Banking Commission. One bank is currently under interim administration and the remaining two are being taken over by the government through conversion of illiquid deposits into share capital.
As part of the WEAMU, Cote d'Ivoire shares an interbank market with all countries in the Union; similarly, bank licenses are valid for all of WAEMU's countries.
The provision of financial services in rural areas, to small and medium sized enterprises, as well as the mobilization of long-term savings and the financing of long-term investment is still deficient. The microfinance sector, in particular, has been severely affected by the lasting conflict and related lack of smooth funding flows. Approximately 90 percent of credit and savings activities are concentrated in just two cooperative networks, which currently face difficulties, and constitute a systematic risk for the microfinance sector. To reverse this trend, the Ministry of Finance issued a National Microfinance Policy at the end of 2007 along with a detailed Strategy and Action Plan for 2007-2015 aiming at achieving a viable, integrated and diversified microfinance sector with penetration over the whole country by 2015.
The mobile market in Cote d'Ivoire is very competitive and fragmented. In December 2008, Orange Cote d'Ivoire launched its new mobile money product, Orange Money., followed by MTN. Mobile phone subscription rate is high and has passed from 77 percent in 2007 to 76 percent in 2010.
The Bourse Régionale des Valeurs Mobilières (BRVM), headquartered in Abidjan, serves as the regional Stock Exchange for member countries of the West African Economic and Monetary Union (WAEMU). Trading is minimal despite 45 company listings. Stock market capitalization decreased from 33 percent in 2007 to 28 percent in 2010.
The regional and national fixed income market is still in its embryonic stage, with the Central Bank playing a significant role as one of the main issuing entities in the region. As of March 2013 Côte d'Ivoire received no sovereign rating by any of the three major credit rating agencies. In recent years, member countries have begun to finance their public spending by issuing treasury bills in lieu of central bank loans. The number of corporate issues is still limited. Similar to many other African countries, the country's investor base is still dominated by commercial banks.
For its part, the insurance market has experienced remarkable growth, which has risen from 9% in 2009 to 13% in 2010. Still, major reform will be necessary to ensure that it is financially sustainable. As for pension funds, both the CNPS (private sector) and the CGRAE (public sector) incur sizable deficits and recent actuarial studies highlighted the need for urgent reforms.
|2007||2008||2009||Average Africa 2009|
|Liquid Liabilities /GDP||0,258||0,294||0,336||0,412|
|Deposit Money Bank Assets / GDP||0,178||0,2||0,226||0,32|
|Other Financial Institutions Assets / GDP||n.a.||n.a.||n.a.||0,288|
|Private Credit By Deposit Money Banks and Other Financial Institutions / GDP||0,141||0,155||0,173||0,272|
|Bank Credit / Bank Deposits||0,859||0,848||0,837||0,728|
|Net Interest Margin||0,038||0,029||0,022||0,069|
|Stock Market Capitalization / GDP||0,32||0,557||0,99||0,947|
|Remittance Inflows / GDP||0,009||0,009||0,008||0,237|
|Mobile Cellular Subscriptions (Per 100 People)||37,111||50,745||-||40,33|
|Private Credit Bureau Coverage (% Of Adults)||0||0||0||4,539|
|Public Credit Registry Coverge (% Of Adults)||2,8||2,9||2,7||2,575|
For statistical coherence and comparability purposes, the FSDIs are extrapolated from a limited number of sources (AfDB, IMF, OECD, WB), where a common data collection methodology was applied to all countries surveyed. For additional data from other sources, please refer to the Documents section.