Ouattara says Ivory Coast to issue bond as economy booms

By Loucoumane Coulibaly

KORHOGO, Ivory Coast (Reuters) - Stronger-than-expected cocoa production in Ivory Coast would drive economic growth of around 9 percent this year, supported by higher public infrastructure spending and rebounding private investment, President Alassane Ouattara said.

A robust post-war economic recovery will help Ivory Coast to tap international markets with a $500 million bond issue by October, Ouattara said in an interview, appealing to the opposition to heal war wounds.

Ivory Coast was racked by a 2011 civil war which killed 3,000 people and displaced tens of thousands more after former President Laurent Gbabgo refused to recognise Ouattara's election victory.

Ouattara, who won the conflict with French support, has since steered a dramatic recovery in Francophone West Africa's economic powerhouse. Growth hit 9.8 percent last year as investors flocked to agriculture, mining and oil.

"We are in a position to achieve economic growth of at least 9 percent in 2013," Ouattara, a former IMF official, told Reuters. "The indications we have for the first half of the year show that cocoa production will be stronger than forecast, so will cotton production."

Ouattara said the cocoa harvest in the world's number one producer would be at least as good as last year, when Ivory Coast produced around 1.5 million tonnes. Cocoa production, which accounts for 40 percent of Ivorian exports, had been expected to fall this year.

Fresh tax incentives would encourage investment in cocoa grinding, allowing the country to process up to 80 percent of its crop locally versus 30 percent at present, he said.

In addition to robust growth, a budget deficit of only 3-4 percent of GDP, low inflation and a foreign debt of just 15 percent of GDP meant the time was right to tap international markets, just two years after a bond default, Ouattara said.

Ivory Coast comprises roughly half of the $80 billion economy of the eight-nation West African currency bloc. Its CFA franc currency is tied to the euro at a fixed rate of one euro to 656 CFA francs, guaranteed by the French treasury.

The fixed rate made it easier for Ivory Coast to issue bonds to international investors in its own currency, Ouattara said.

"We hope to be able to raise $500 million in the next months on international markets, denominated in CFA francs," said Ouattara. "We're in talks with some major French, English and American banks and I hope that from here to September or October, we'll be able to issue the bonds."

SITUATION DEMANDS A SECOND TERM

Ivory Coast said in January it would issue $1.2 billion of debt this year to fund infrastructure projects and a 93 billion CFA franc three-year bond this month was oversubscribed. The government plans to spend around $20 billion through 2015 on a sweeping development programme.

It received more than $4 billion in debt relief last year under the IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme.

With many ordinary Ivorians complaining economic growth has not made their lives better, Ouattara said he was looking at how to improve their purchasing power by increasing salaries and monitoring prices, especially basic footstuffs.

Ouattara said his decision to seek re-election, which he announced last week, was prompted by the scale of the task to get Ivory Coast's economy back on track.

"If the situation was less degraded, believe me that I would not happily seek a second term. But the situation demands it."

Ouattara said Gbagbo's Ivorian Popular Front (FPI) should ask the families of civil war victims for forgiveness for massacres and rapes carried out during the conflict, in a bid to spur reconciliation. "Repentance opens the way to pardon by those close to the victims," he said.

Gbagbo currently faces trial at the International Criminal Court, where judges have given prosecutors until November 15 to build a case against him.

Ouattara said prosecutors were investigating abuses committed during the war but he said the process could take years, as it had in other countries, and justice must be allowed to work at its own pace.

Ouattara acknowledged that many Gbagbo supporters were in prison but he denied that his own allies were receiving favourable treatment for crimes allegedly committed during the war.

"There will be no impunity. This commission will do its work regardless of who is involved," Ouattara said.

Source: http://news.yahoo.com/ouattara-says-ivory-coast-issue-bond-economy-booms-061246373.html

arnold palmer augusta national blake griffin pau gasol marlins park marbury v. madison 2013 lincoln mkz