Ivory Coast’s future is bright, with significant social and economic changes underway.
The West African country’s economic growth averaged an impressive 9% between 2012 and 2015, and 7% between 2016 and 2019. Despite the negative impact of the COVID-19 pandemic, the average growth rate is expected to jump to 7.7% from 2021 to 2025. Private investment is expected to increase by mid-decade, accompanied by a significant reduction in poverty. Through all this, infrastructure development is expected to play an important role in increasing the country’s prosperity.
But the optimism that is spreading in Ivory Coast and across Africa is dampened by vast disparities that cut across the rural-urban, northern-southern divide, and the ever-present shadow of climate change. Local connectivity is essential to increasing accessibility and reducing inequality. In Côte d’Ivoire, where the railway network is underdeveloped, the road network provides the bulk of transportation and is important not only for access to basic services, but also for supporting access to international markets for agricultural products and supporting growth. At the same time, Côte d’Ivoire is highly vulnerable to climate, with heavy rains often causing extensive damage to the road network. Climate change threatens to widen the infrastructure gap between urban and rural areas, affecting the development of entire countries.
To support the country’s needs for connectivity and climate-resilient infrastructure, the Asian Infrastructure Investment Bank (AIIB) has signed a €187.4 million (US$200 million) loan for inclusive connectivity and rural infrastructure projects with the Republic of Côte d’Ivoire. The Ivorian government and the World Bank are co-financing the project.
This project is a milestone. This marks AIIB’s first infrastructure project in both Ivory Coast and Sub-Saharan Africa, strengthening its commitment to the continent.
“Recognizing the huge potential of sustainable energy and connectivity infrastructure to support sustainable growth in African countries, the AIIB is actively stepping up its efforts to contribute to global climate mitigation efforts and strengthen connectivity between Africa and Asia,” said Suzanne Shaw, Infrastructure Economist at the AIIB.
AIIB has so far carried out nine projects in Africa, Ivory Coast, Egypt, and Rwanda. In Egypt, the AIIB financed infrastructure projects in the transport, water and energy sectors and supported on-lending facilities for sub-projects in the infrastructure sector through the National Bank of Egypt. In Rwanda, the AIIB, through its Crisis Recovery Facility, is funding a loan scheme to support small and medium-sized enterprises as part of pandemic recovery efforts. In 2022, AIIB supported Ivory Coast’s vaccination and health system strengthening through the same facility.
The Ivory Coast Comprehensive Connectivity and Rural Infrastructure Project addresses 11 underserved areas in the country’s north and includes rural road upgrades and climate action to improve access to schools, health services and rural markets. The project will also develop climate-resilient infrastructure in the agricultural logistics chain, a key element of economic activity in the northern region, which is highly dependent on agriculture. Women in particular stand to benefit as they are disproportionately affected by poor quality roads and infrastructure, which restricts their access to education, health care and active economic activity.
“As a development partner, the AIIB places great importance on aligning investments with member countries’ development priorities, while upholding the Bank’s commitment to sustainability,” said Mr. Shaw.
Through this project, 7,000 kilometers of local roads will be developed and 15,000 kilometers will be maintained, providing reliable all-weather access to approximately 3.67 million people. Together with the development of climate-resilient agricultural logistics infrastructure, the project will strengthen regional economic activity and trade links and forge stronger links with Asia.
The project involves the country’s major cotton and cashew producing regions. Together, these agricultural products account for approximately 50% of exports to Asia. The aim is to limit post-harvest losses, reduce transportation costs and alleviate bottlenecks in agricultural transport, particularly with Asia. What is noteworthy is that Ivory Coast’s trade with Asia has been consistently growing at an average annual rate of approximately 12%.
“Investments that strengthen trade links within and across the African region facilitate the international movement of goods, technology and people. This is critical to remaining competitive and achieving growth in a globalized world,” Shaw said.
Mr Shaw said the project would also support capacity building in the private sector, allowing it to play a greater role in the development and maintenance of long-term road infrastructure, allowing it to remain operational and active beyond the life of the project.
In addition to its connectivity benefits, the project is also considered “green infrastructure.” All major thoroughfares within the project area will be made resilient to climate-related challenges. Notably, 51% of the loan, or approximately US$102 million, is earmarked for climate adaptation financing.
Additionally, the project includes measures to incorporate climate resilience into road safety, road asset management, and road maintenance planning and execution, as well as to mitigate the effects of climate change through nature-based solutions in road infrastructure development, such as tree planting. This initiative demonstrates the AIIB’s commitment to promoting sustainable practices and helping member countries meet their Paris Agreement commitments.
“Connectivity and green infrastructure are key pillars to achieving sustainable economic growth in Africa,” Mr Shaw said. “Strengthening energy access, increasing low-carbon energy-related infrastructure and promoting e-mobility are key green infrastructure areas with great potential to build sustainable growth in Africa. Investments in these areas can deliver local environmental improvements and contribute to climate action, supporting development with sustainability at its core.”
Through its work in Ivory Coast, AIIB aims to further explore the connectivity and green infrastructure needs of Africa’s emerging economies. AIIB also hopes that its participation in infrastructure financing in Africa will help attract private sector interest in infrastructure investment in the region.
With the theme “Sustainable Growth in a Challenging World”, the AIIB will hold its first annual general meeting in Africa on September 25-26, 2023 in the Egyptian city of Sharm el-Sheikh. Registration for in-person participation will close on September 10, 2023 at 11:59 PM (GMT+8). AIIB’s Annual Meeting program offers a wealth of engaging sessions exploring the latest trends and issues related to sustainable growth and infrastructure connectivity.
“Our cooperation across Africa’s various fronts is at an early stage,” said Konstantin Limitovsky, vice president of investment operations at AIIB. “Our team looks forward to building strong relationships with infrastructure stakeholders in Ivory Coast and Africa and exploring new opportunities in this sector to expand connectivity and resilience towards a cleaner, greener and more sustainable planet. There are many exciting opportunities and our work is just beginning.”
This article originally appeared on CNBC Africa.
