Debt turned into gift is not grant if Ivory Coast cannot use it independently, says economist
DOUALA, Cameroon
An Ivorian expert told Anadolu Agency on Friday about his concerns about the configuration of the more than $1 billion in debt that turned into a gift.
It came after the recent signing of a third debt reduction and development contract between France and the Ivory Coast.
French and Ivorian authorities signed the debt relief and development contract Wednesday in Paris.
“It’s not really a grant if Ivory Coast can’t use it independently,” said Henri Agnero.
The more than €1 billion ($1.15 billion) is intended to finance education, training, urban development and health and is part of the Heavily Indebted Poor Countries initiative of the International Monetary Fund (IMF).
“The impact should normally be positive and this resource should allow us to make investments in business and especially in infrastructure that can boost the economy,” he said.
But Agnero acknowledged “an excellent economic relationship” between the Ivory Coast and France and said he believes the African nation earned the debt relief after receiving two other contracts in 2012 and 2014.
“The country had to implement many reforms and has suffered crises that have not helped its economy,” he said.
Agnero lamented “impoverishing economic growth” which he said was due to the conditionalities of the contracts that bind the Ivory Coast and its primary lender, France.
In this context, the French Development Agency is responsible for monitoring the contract on behalf of the French government, as well as technical implementation. The general orientation is also defined by France.
“This type of operation is not very advantageous for the beneficiary country because it forces it to accept foreign company’s investments and gain what the Ivorian economy should,” he said.
It is, therefore “a fool’s bargain” that contributes to the impoverishment of the country’s current economic growth, he said.
Moreover, referring to the resistance of infrastructure built under the contract, he said it is “limited and pushes the state to take more loans.”
He said “it is a vicious circle” that penalizes the proper functioning of the Ivorian economy that is already subject to debt repayment with more than half of its annual budget.
As an alternative, Agnero recommended the creation of wealth at the local level or a different management of debt reduction.
