Boston, MA -- (ReleaseWire) -- 03/12/2014 -- We maintain our positive outlook for growth in Cote d'Ivoire's construction sector over the medium term, with annual average real growth of 8.3% expected between 2014 and 2018. In line with the country's US$22.8bn National Development Plan, significant investment is taking place in the country's infrastructure sector. Funded by public and private sources, the country is experiencing a boom in investment into the transport and power sectors, while growing natural resource investment is eating additional demand for new capacity. However, the security and political risks remain very real threat, although a significant deterioration in the political climate is not our core view.
Construction growth is estimated to have rebounded strongly in 2013 following a six-year contraction due to lengthy unrest. The recovery is expected to be sustained at least through to 2015, when the country's national development plan draws to a close. Government investment into addressing the country's widereaching infrastructure deficiencies, following decades of underinvestment, is filtering through to projects. While private investment is also picking up as political stability improves and the economy picks up.
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Investment into the country is being guided by the 2012-2015 National Development Plan. Approved in March 2012, the XOF11,076bn (US$22.8bn) outlines investment across a number of sectors - including a heavy focus on infrastructure - as well as social spending and improvement governance. Infrastructure, energy, water and other heavy industries are outlined as key areas of investment, while social infrastructure such as schools and hospitals will also receive attention, in line with the government's 'pro-poor' agenda. The programme will be financed through a combination of public and private financing, with the government looking to continue its impressive start in the public-private partnership (PPP) market to further fund infrastructure projects.
The government element of the NDP will be funded by an improved financial position of the government. This is supported by numerous debt cancellations and growing tax revenues, in addition to growing revenues from gold mining and cocoa production. There is also longer-term potential for growing oil production as offshore exploration takes off, while offshore natural gas production is already seeing strong growth, with output doubling in 2013 (versus 2012), and hoped to increase a further 14% in 2014.
At the same time, the private sector is returning to growth, following years of political uncertainty. This drive for private investment in infrastructure is being support by development funding and, most crucially, the World Bank's Multilateral Investment Guarantee Agency (MIGA), which has been providing investor guarantees for flagship projects in the country.
Projects guiding our positive outlook:
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