A major African industrial and trading hub for many centuries, Côte d’Ivoire now seeks to upgrade its trade routes and move up the value chain, managing risks by changing cultural attitudes around the importance of insurance
Following independence in 1960, Côte d’Ivoire manufactured little more than timber by-products, textiles, and food processed from local agricultural products. Following decades of industrialization, the country’s energy, oil and gas processing, mining, manufacturing and food processing activities now make up a vibrant secondary sector which is posting annual growth rates of around 13%. As part of its goal to transform the country into an emerging economy by 2020, the Ivorian government has put in place a number of initiatives to increase the share of the industrial sector in the national economy to 40%, up from about 30% in 2011. With an investment of 152 billion francs (approx. $250 million), the National Industrial Restructuring and Upgrading Program, known by its French acronym PNRMN, will run until 2018, promoting greater competitiveness, increased productivity and more value addition for Ivorian industrial enterprises.
With this program, hopes are high that the country will be able to upgrade its export activity from raw materials – unprocessed coffee, cocoa, cashew, palm oil, cotton and rubber – to intermediate and finished products with partners such as the U.S., which is currently its main export destination receiving 8.5% of total Ivoirian goods, valued at an annual $1.25 billion.
“We have excellent relations with the U.S.,” says Souleymane Diarrassouba, Minister of Commerce. “For us, it’s about trading more value-added products than primary materials.”
In energy and mining alone, the Ivorian government has estimated that there are $27 billion worth of investment opportunities across almost 200 industrial projects, which it hopes will position the country as an exporter of power and commodities to the entire region, as well as meeting growing demand at home. In agro-production, the country, already the world’s biggest cocoa producer, plans to process at least 50% of its cocoa beans within the country by 2020, adding value to its cash crop.
The private sector has an important role to play in keeping the supply chain moving, with insurance seeing greater take-up on both the domestic front – as awareness grows of its potential to help enhance productivity for exporters by protecting them from risks, providing a foundation for economic growth – and on the international front, as the ever-greater numbers of foreign investors who enter the country seek local risk mitigation for their activities.
La Loyale Group, a local insurance firm, is part of this change. It is a member of the Globus Network, which includes together 40 members across 50 countries, and its financial rating from specialized firm Bloomfield Investment allows it to approach foreign clients who invest not only in Côte d’Ivoire, but across the region.
“We realized that large investors invest everywhere: Côte d’Ivoire, Burkina Faso, Benin, Congo, etc. They need insurance in order to accompany their investment. We provide that whole service through Globus. We have a representative in each country so investors no longer need to move. This saves them not only time but also money,” says Bernard Asso Abouo, the company’s CEO. While gaining business overseas has been relatively straightforward for the firm, with Abouo noting that his company representatives have travelled to the U.S. to meet with potential investors even prior to them landing in Côte d’Ivoire, convincing local Ivorians of the benefits of insurance has meant taking a slightly more innovative approach. “When we created La Loyale, our priority was to create a culture of insurance, to make Ivorians understand insurance,” says Mr. Abouo. The company did this by translating the concepts of insurance to everyday language. The local word “Yako”, which is used to express compassion and empathy, became the name of an insurance product covering death and funeral expenses. This helped La Loyale’s brand positioning as a caring local firm. “The original meaning is about people empathizing with your problems,” says Mr. Abouo. Even the name of the company itself, “Loyale”, denotes loyalty between the company and its clients. “For us, insurance is similar to solidarity, because the African person and solidarity go together. That is to say that Africans do not stay indifferent when faced with a problem. They will look for a way to contribute and overcome it,” Mr. Abouo says.
Today, La Loyale has set its sights on accompanying the investors coming to Côte d’Ivoire, offering a powerful combination of on-the-ground market knowledge and a globalized network of intermediaries to smooth the path for new investment projects. “Unlike other insurance companies who simply make proposals, La Loyale offers its clients more. We open up other possibilities with partners that clients could not have found elsewhere. With this offering, the entrepreneur or the client is inevitably left happy,” adds Abouo.
“Our objective is to improve the business climate in Côte d’Ivoire. We want to have a modern, model and well-performing customs framework. If a country has good customs, investors have a regulatory and protective organ to take care of them”
Colonel Major Issa Coulibaly, Managing Director, General Directorate of Customs
For Jean-Claude Brou, Minister of Industry and Mining, the growing focus on new investors and value addition means finding more space for facilities. “There are three industrial areas in Abidjan: Vridi, Koumassi and Yopougon. They are substantially saturated,” he says. Indeed, rental fees have remained unchanged since the zones’ establishment in 1972, allowing tenants to pay some of the region’s lowest fees, with a cost per square meter of between 0.10 and 0.25 euros.
“Our economy is growing at 9% on average, and this means that the investment rate is very high. There are many companies who want the land. The three areas are practically full, so we had to create a new one.” This new site, the PK24, stretches over 950 hectares and is being developed progressively in partnership with the private sector to create a modern industrial zone. New tenants will include Brassivoire, a beer manufacturer formed by a joint partnership between Dutch firm Heineken and multinational conglomerate CFAO.
Key to moving up the value chain is ensuring that goods and products can be moved quickly and efficiently out of the country, which Colonel Major Issa Coulibaly, Managing Director of the country’s General Directorate of Customs, has made a priority. “Our objective is to improve the business climate in Côte d’Ivoire,” he says. “We want to have a modern, model and well-performing customs framework. If a country has good customs, investors have a regulatory and protective organ to take care of them.” He points to the country’s so-called single point of foreign trade, which is currently under development. A one-stop shop for commerce, it will centralize all business operations and enable goods to be cleared through customs without cumbersome paperwork. “It’s about ensuring that investors do not waste their time. At the airport, the control must be fluid. Depending on the behavior of the customs at the airport, the investor may want to extend his visit to deepen his knowledge of the country and invest, or immediately get back on a plane. This is why we insist on the respect of ethics and our duty to investors.”