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Ivory Coast: A Story of Local Companies’ Struggle for Survival

By Selay Marius Kouassi 

Since the 2010-2011 post-election crisis in the Ivory Coast, the country has seen a serious decline in the number of initiatives to further social and economic development. Now, perhaps to compensate, the number of projects taken on by the Ivorian government has exploded. But in this rush of projects, multinational companies have taken the lion’s share of major contracts, and local companies, denied a share of the pie, have had to reinvent themselves in order to stay competitive.

Colossal Projects 

The contract for the construction of a 53-mile dual highway linking the country’s biggest city Abidjan to the capital Yamoussoukro, worth $292 million, was awarded to a Tunisian company known as the Soroubat Group. A similar highway, worth 100 million, was built from Abidjan to the tourist town of Grand-Bassam by China Machinery Engineering Corporation. And Ivory Coast’s biggest electricity generating plant, the Soubre Hydroelectric Dam, with a capacity of 270 megawatts, is being built by a Chinese company, Sinohydro Corportion, which will also operate it upon completion.

Bouygues Group, a French company, built a one mile-long bridge in Abidjan named after former President Henri Konan Bedie. Financed jointly by foreign partners and the Ivorian government, the $227 million project is expected to reduce traffic congestion in a city with 6 million inhabitants. Another $37 million was funneled into a bridge project undertaken by an Egyptian firm, Arab Contractors, in the small beach town of Jacquesville, in the south of the country.

Along with the construction of highways, dams, bridges, hospitals, oil pipelines, and an extended electricity grid, the country’s entire road network renovation—including the construction of drains and sewers and the tarring of gravel roads—is being carried out by large foreign firms such as Colas and Razel Fayat.  

Multinational corporations in the fashion and food industries are also bringing their products to the Ivory Coast. Foreign brands such as Nike, Chanel, Gucci, Armani, and Lacoste can be found in the shelves of shopping malls across the West African country. And fast food dealers such as Hellofood, Burger King, KFC, and McDonald’s abound on the streets of Abidjan.

Improved Business Climate

To attract private investments and boost economic growth, the Ivorian government adopted a new investment code in 2012 that offers several incentives, including tax reductions and targeted exemptions from value added taxes, designed to attract private investors. As part of its commitment toward improving the country’s business climate, the government set up a Public Procurement Regulation Agency (ANRMP), a High Authority for Good Governance (HABG), and a commercial court, the first of its kind in the country. 

The multinational corporations attracted by these incentives are now overwhelming smaller- and medium-sized enterprises that do not have the financial, technological, or managerial capacities of their foreign counterparts.

Explaining some of the measures the government has taken to help local companies, the Trade Minister of the Ivory Coast, Jean-Louis Billon, declared: “The government is working to reduce the fiscal pressure on local companies, and it has committed to reserve a large part of subcontract projects to local companies to enable them to remain active on the market, and to play a more effective and greater role in the national economy.” 

But local business managers tell a very different story. 

Hopes and Struggles

“There still is a gap between the government’s words and deeds. Local business owners are very often forced to pay a bribe in order to capture a market share,” Jean-Phillipe Adou, a 37-year entrepreneur in Abidjan, said. “How can your small business compete with a foreign firm when the government still owes you [a] huge amount of money through domestic public debt and is not showing any willingness to pay? As a result, many local competitors are being wiped out by large foreign companies.” 

Jacques Assahoré, the deputy director of the Treasury and Public Accountancy, acknowledged that the government has yet to clear the arrears of the internal debt for some 3700 private suppliers and contractors. The current debt hovers around $318 million.

“Many local companies are going through an extremely difficult time now, and the government is not showing its commitment to paying off the debts,” said Faustin Gré, the Chairman of SYNAFECI, the government suppliers and contractors union. When Gre and his collaborators staged a sit-in and hunger strike in front of the Presidential Palace in Abidjan, in an effort to bring the matter to the attention of President Alassane Ouattara, they were arrested by anti-riot police. 

While some local companies are being harmed by the presence of foreign rivals and the indifference of the Ivorian government, others have been inspired to innovate in specialized spheres that multinationals cannot access. 

“You can’t compete with McDonald’s, Burger King, and other multinational eateries in making hamburgers, fried chickens, and chips,” said Stéphane Elloh, a deliveryman at Garba Ivoire, a local food supplier. “But you can counter the competition by customizing your offerings to meet local needs. You can provide local menus that those fast-food giants lack the expertise to make, and that is clearly what we are doing at Garba Ivoire.”

Garba Ivoire’s menu includes the affordable local attieke dish—cassava ground into couscous-like grains and served with fish—which is becoming more popular across the Ivory Coast and West Africa.

In the textile and fashion industry, popular brands like Versace, Giorgio Armani, Louis Vuitton, Diesel, and Converse have been adapted to cater to the local population. “I get traditional attires such as tapa and kinte from the village. I cut them into small pieces. I design original motifs and sew them into clothes or shoes. The idea is to bring back the long-forgotten clothes worn by rural populations and to make money at the same time. And I can assure you that it sells well,” said Carine Séry, a 27-year old female designer from the Ivory Coast. 

Blessing in Disguise

The arrival of multinationals to the Ivory Coast may have sent a number of small businesses packing, but it has inspired others to discover and develop fresh approaches. While local companies still lack advanced technology and solid funding, they have exploited their extensive knowledge of Ivorian culture to survive. 

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Dr. Selay Marius Kouassi is an Ivorian multi-award winning journalist, a media researcher, and trainer. 

[Photo courtesy of Flickr]

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