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Recurring unrest may cut Ivory Coast's investor appeal

Wednesday, May 24, 2017

Significance

The clash follows a recent five-day army mutiny which ended in a government agreement to pay mutineers outstanding bonuses of 7 million CFA francs (8,500 dollars) each on top of 5 million CFA francs they received in January, in a total payout of 101 billion CFA francs. Low cocoa prices have taken their toll on the world’s largest cocoa producer, with President Alassane Ouattara’s administration announcing a 9% budget cut across all ministries earlier this month.

Impacts

  • Government finances will become more strained, which may lead to a scaling-back of infrastructure investments and social programmes.
  • The government is unlikely to achieve its target of processing 50% of cocoa in-country by 2020.
  • The government could delay a planned Eurobond and may have to increase the risk premium to reassure investors.
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