Knowledge for Development

Prices of raw materials, budgetary earnings and economic growth: A case study of Côte d’Ivoire

Author: Nguiakam Sandrine and Kabore Augustin


Date: 14/03/2012


(First Prize, ‘Young Professionals in Science’ competition)

Côte d’Ivoire contributes to global trade through a limited range of products including cocoa, coffee, timber and oil. According to statistics on external trade, these few products have accounted for more than half of the value of exports since the attainment of independence. Like the majority of Sub-Saharan African countries, Côte d’Ivoire is a ‘price taker’. For this reason, it does not wield any control over prices of its exports or imports. Furthermore, its exports are quoted in foreign currency and it has no control over the exchange rate, which affects the export earnings quoted in national currency. It therefore seems that Côte d’Ivoire’s dependence on raw materials makes the country vulnerable. This study evaluates the impact of the fluctuation of international prices of raw material on the variability of the gross domestic product (GDP) in Côte d’Ivoire. The specific objective was to analyse the Ivorian export structure in order to highlight the importance of raw materials in export earnings; to analyse the coffee and cocoa sectors, the oil sector and stakeholders; to evaluate the influence of price fluctuations on revenue from entry-point taxation; to highlight the impact of the variation of this revenue on Ivorian economic growth. Results illustrate the need for the continuation of efforts aimed at diversifying the economy, and encouraging the setting up of an observatory, in order to predict and weather the various shocks.

Article taken from the 2011 CTA/FARA publication ‘Agricultural Innovations for Sustainable Development’ Volume 3, Issue 2.


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