COTE D'IVOIRE: USITC STUDY ON SUB-SAHARAN AFRICA

UNCLAS SECTION 01 OF 02 ABIDJAN 001134

SIPDIS

SIPDIS

PLEASE PASS TO USITC (LSCHLITT, BGEHRKE)

E.O. 12958: N/A
TAGS: ETRD IV
SUBJECT: COTE D'IVOIRE: USITC STUDY ON SUB-SAHARAN AFRICA

REF: A. A. ABIDJAN 1069 B. SECSTATE 146622


B. ABIDJAN 1114


1. Per reftel B instructions, post has compiled information
on the below industries. Please refer to Ref C for
information on the Stock Market Exchange with regard to the
request for information on financial services. Included in
this cable is information on the banking sector.


2. Banking: Cote d'Ivoire's banking system developed during
the colonial period as an extension of the French financial
and banking systems. In its capacity as a central bank and
monetary authority, the Central Bank of West African States
(BCEAO) oversees and regulates banks and financial
establishments conducting activities in the eight member
States of the West African Economic and Monetary Union
(WAEMU). WAEMU supervises banks and non-bank financial
establishments through inspections and off-site analysis to
ensure compliance with regulations. Monetary policy is
conducted regionally by the BCEAO. It has the sole right of
currency issue and its primary objectives are to maintain
parity between the CFA franc and the euro and to control
inflation in the zone. The BCEAO is pledged to guarantee
price stability and pegs region's common currency to the euro
through a special arrangement with the French Treasury in
which France provides balance of payments support in times of
temporary deficits while the BCEAO is required to deposit at
least 65% of its foreign assets in its operations account in
the French Treasury and limit its loans to member states'
state treasuries to 20% of their respective tax revenues.

-- Cote d,Ivoire has the largest bank network in the region.
Banking activity is centered around the largest six banks,
which account for more than 75% of total assets: Societe
Generale des Banques en Cote d,Ivoire (SGBCI),an affiliate
of the French group, Societe Generale; Banque Nationale de
l,Investissement; Banque Internationale pour le Commerce et
l,Industrie (BICICI),owned by Banque Nationale de Paris
(BNP); Banque Internationale Pour l,Afrique Occidentale
(BIAO),which is a subsidiary of Belgian Belgolaise; Ecobank;
and Societe Ivoirienne de Banque (SIB),owned by the French
group Credit Lyonnais. Ivorian credit institutions account
for 31.3 per cent of all WAEMU bank balances, a share
somewhat lower than that of the Ivorian GDP in the regional
economy (37 percent).

-- Prior to the outbreak of the 2002 political crisis, the
development prospects for the microfinance sector were
significant. For example in 2000, the country counted 16
microfinance institutions, offering a total of 287 points of
service (for about 331 000 customers),compared with 154 bank
branches.

-- The political crisis has disrupted banking operations,
causing the reduction of about 10 percent of overall
activity. The crisis has hurt the banking sector through
business closures, sale and job losses, all of which resulted
in client insolvency and an increase in non-performing loans.
Due to these increased risks, banks concentrate resources on
the financing of short-term loans and business operations and
are reluctant to finance long-term loans and investments.

-- The Bourse des Valeurs Mobilieres Regionales (BVRM),
located in Abidjan, offers firms throughout the WAEMU region
access to capital outside of traditional bank financing.. It
suffered from the 2002 crisis due to the prevalence of
Ivorian companies on its books, but has begun to expand
listings and capitalization as well as see its index rise in
recent years.

-- According to sources within the industry, the large banks
and new players such as the Bank of Africa, are expanding,
making access to banking services more readily available to
the public. However, the low rate of access to the banking
sector in the country remains a major problem. The banking
system includes 17 credit institutions (against 22 in 2003),
16 of which are banks (ten in 2003) and 2 financial
institutions (five in 2003).


3. Cashews: Cashew production in Cote d'Ivoire has risen
in recent years due in large measure to the investments and
management of OLAM, a Singapore-based commodities firm which
is the largest trader of cashews in the world and the largest
processor of cashews in Africa. OLAM is working closely with
USAID and Kraft, the largest marketer of processed cashews in
the world. Cote d'Ivoire produced 135,000 metric tons in
2005, up from 115,925 metric tons in 2004, and from 2003 to
2005, cashew production has increased by 37%. The cashew
industry has a lot of potential for growth, but occupies a
very small piece of the overall commodities pie in Cote
d'Ivoire given the less than one percent GDP it occupies.

ABIDJAN 00001134 002 OF 002




4. Coconuts, prepared and preserved fish, wood veneer
panels: Despite sending inquiries to government and
industry officials, post received no information regarding
these industries outside what is publicly available on the
Internet. Food and Agricultural Organization (FAO)
statistics for the coconut sector indicate that Cote d'Ivoire
increased production from 2915 metric tons in 2003 to 11,613
metric tons in 2004, despite unit values falling from USD 743
per metric ton to USD 340. Cote d'Ivoire produced 323,000
cubic metres of wood-based panels in 2004, according to the
FAO..
Valle