36 – Cote d’Ivoire
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GEOATLAS - Copyright1998 Graphi-Ogre
1. Overview of Financial System
100
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Commission (Commission Bancaire) responsible
Côte d’Ivoire is a member of the West African
for overseeing and supervising banks and financial
Economic and Monetary Union (UEMOA) established
institutions. The BCEAO also controls the
in January 1994, and comprising eight West African
Savings and Financial Markets Regional Council
countries (Benin, Burkina Faso, Côte d’Ivoire, Mali,
(CREPMF).
Niger, Senegal, Togo, and Guinea Bissau) which are
called up in the amount of XOF 134 bn, is entirely
members of the Franc Zone and use the CFA Franc
subscribed by the member States and shared
(XOF) issued by the Central Bank (BCEAO). The
equally among them.
UEMOA financial markets are administered through
The capital of BCEAO, currently
• Micro-finance institutions are governed by a
the following institutions:
separate law, the PARMEC (Projet d’Appui à
• The Conference of Heads of State, which decides
la Réglementation des Mutuelles d’Epargne et
on the accession of new members. • The Council of Ministers, which defines, among others, the monetary and credit policy of the Union to safeguard the value of the CFA Franc. • The UEMOA Commission, as delegated by the Council of Ministers, is in charge of the day-to-day administration of the Union.
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Population (mn) 18.5 SENEGAL Population Growth (annual %) 1.6 Official Language French Currency CFA France (XOF) G U I N E E GDP (Current US$ bn) 17.3 GDP Growth (annual %) 1.4 GDP Per Capita (US$) 936 SIERRA� LEONE FDI, net inflows (US$ mn) (2005) 192 External Debt (US$ mn) 13,000 Monrovia L I B E R I A External Debt/GDP (%) 75.3 CPI Inflation (annual %) 2.4 Exports of goods and services (% of GDP) 52.5 Gross Official Reserves (US$ bn) 1.5 Gross Official Reserves (in months of imports) 3.6 A UNDP HDI Ranking 164
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2006 At a Glance
Kayes
de Crédit) Law, which regulates micro-finance activities in all WAEMU countries. Côte d’Ivoire is also a signatory to the OHADA Treaty, which harmonizes business law in 16 countries in Sub-Sahara Africa, including all the UEMOA countries. The main objective of the monetary policy as
• The Central Bank of West African States (BCEAO)
defined by the UEMOA and implemented by the
is the central bank and controls the Banking
BCEAO, is to ensure price stability and safeguard the
Lokossa
Lomé
Cap St-Paul
Cote d’Ivoire – 37 domestic and foreign value of the CFA Franc through
operating in the country, with a total turnover of XOF
appropriate coverage of currency issue by foreign
130 bn; life insurance products represented 39%
exchange reserves.
and vehicle insurance 24% of the turnover.
Bank and Non-Bank Financial Sector
Capital Markets
As of December 2006, there were 93 banks and 22
The Regional Stock Exchange (BRVM), the stock
financial institutions operating in the UEMOA zone,
market for the UEMOA region, started operating in
with 16 banks and two financial institutions located in
September 1998. It is located in Abidjan and has
Côte d’Ivoire. The total balance sheets of the financial
a branch in each capital city of the other member
system in Côte d’Ivoire, amounted to XOF 2001 bn at
States of the Union. Its main role is to pool and
the end of 2005, with the banks accounting for 98%,
process stock market orders transmitted by brokerage
representing 26% of the country’s GDP. Despite
companies (Société de Gestion et d’Intermédiation-
the difficult social-political situation, Côte d’Ivoire
SGI) authorized to negotiate securities quoted on
still accounts for the biggest portion (30%) of the
the BRVM. As of December 2006, 19 SGIs were
UEMOA financial system. The resources of banks
registered in the Union with nine located in Côte
and financial institutions amount to XOF 1,883 bn,
d’Ivoire. The BRVM is regulated by the CREPMF
including XOF 233 bn as net equity capital. Branches
whose responsibilities include the promulgation
and subsidiaries of foreign or regional banks play a
of policies and procedures to regulate the BRVM,
relatively important role in financial intermediation
and the promotion of a regional bond market. In
in UEMOA. In fact, eight groups (including Société
order to list on the BRVM, all bond issues must be
Générale, BNP Paribas, Crédit Lyonnais, Citibank,
guaranteed by an approved financial institution, a
Bank of Africa, Ecobank, and Financial B.C.)
development financial institution, a guarantee fund, or
dominate the UEMOA banking system with relatively
the Parent Company. At the end of December 2006,
wide national networks.
the capitalization of the equity market was XOF 2067
The insurance sector in Côte d’Ivoire is regulated
bn whereas the bond market capitalization stood at
and supervised by the Inter-African Conference of
XOF 489 bn, with XOF 260 bn being government
Insurance Markets (CIMA) established on 10 July
bonds, representing 1.07% of the GDP of the Union.
1992 in Yaounde (Republic of Cameroon). It includes
By end-December 2006, 61 securities were listed,
the following countries: Benin, Burkina Faso,
including 40 shares and 21 bonds, compared to 57
Cameroon, Central African Republic, the Comoros,
securities comprising 39 shares and 18 bonds by
Côte d’Ivoire, Gabon, Equatorial Guinea, Guinea
end-December 2005. Out of the 40 companies that
Bissau, Mali, Niger, Senegal, Chad and Togo. The
are listed on the Exchange in December 2006, all but
CIMA Treaty came into effect on 15 February 1995.
four were Ivorian institutions.
The regulatory body of the CIMA is the Regional Commission of Insurance Control (CRCA), whereas
2. Fixed Income Markets
the Council of Ministers is its highest body. The total
The benchmark issuer in the UEMOA zone is the
portfolio of the UEMOA CIMA zone is dominated by
West African Development Bank (BOAD), a regional
the secor of non-life insurance. Compared to GDP
multilateral bank. Since 1999, BOAD accounts for
of 2005, the turnover of the insurance sector in Ivory
close to 22% of all the public debt issues in the market,
Coast represents 1.51%, well below the average
i.e. XOF 102 bn. In the absence of a government yield
ratio in Africa of 4.8%. At the end of 2005, 10 life
curve, BOAD bonds are used as benchmarks.
insurance and 20 non-life insurance companies were
38 – Cote d’Ivoire
Outstanding BOAD Bonds Face Amount (XOF billion)
Title
Year of Listing
Frequency
Expiration Date
Listed Bonds
C
BOAD 6,25% 1999-2009
20.12
1999
Annual
1-Feb-2009
BOAD 6,30% 1999-2007
17.05
2000
Annual
27-Oct-07
BOAD 5.85% 2001-2008
11,95
2003
Annual
4-Jan-08
BOAD 5.35%, 2004-2011
22.70
2005
Annual
5-Nov-11
BOAD 5% 2005-2013
18,60
2005
Annual
28-Dec-13
BOAD 4,5%, 2005-2011
6,404
2005
Annual
28-Dec-11
Government Securities
42% of total bond market capitalization and 65.4%
The Ivorian Government has in the past mainly funded
of all outstanding government bonds in the market.
itself by borrowing from the central bank. In 2006,
Compared to the country’s GDP at the same period,
however, the Government opted for the bond market to
sovereign bonds has a ratio of 3%. Institutional investors
fund its deficit. Out of the total amount of outstanding
were the main buyers, representing over 80% of the
public bonds listed on the BRVM by the end of 2006,
total allocation, with more than half of the bond holders
Côte d’Ivoire accounts for XOF 170 bn, representing
originating from the sub-region.
Cote d’Ivoire Government Treasury Bond Face Amount (XOF billion)
Title
Year of Frequency Listing
Expiration Date
Listed Bonds Tresor Public De Ci 6,50% 2005-2008
86.13
2005
Annual
15-Jul-08
Tresor Public De Ci 6,50% 2006-2009
84,20
2006
Annual
17-Jul-09
Non-Central Government Issuance
are privately placed and remain unlisted. Overall, the
The CREPMF requires that corporate bonds be
use of the debt capital market by Ivorian corporate is
guaranteed before they can be listed. This might be
rather limited.
one of the reasons why most of the corporate issues
Cote d’Ivoire - Non-government Debt Issuance Title
Face Amount Year of (XOF billion) Listing
Frequency
Expiration Date
Annual
3-Mar-03
Listed Bonds SAGA-CI 7.5% 2002-2007
3.00
2002
Private Placement Bonds SMB 7.5% 2003-2008
5.00
2004
Semi-annual
11-Dec-08
nestle SA 6.50% 2004-2009
10.00
2004
Annual
26-Jan-09
sifca 6.50% 2005-2011
11.00
2005
Semi-annual
3-Mar-11
sAfca 7% 2005-2010
3.00
2005
Semi-annual
17-Oct-10
Secondary Market As a consequence of the buy-and-hold attitude of most investors, the secondary market in fixed-income
securities in the UEMOA zone is fairly illiquid.
Cote d’Ivoire – 39 Clearing and Settlement
on a dematerialized basis, payment, and delivery of
Securities trades on the BRVM are cleared through
securities. It also guarantees the settlement of each
the central clearing and depository house (Dépositaire
transaction and draws on a special guarantee fund
Central Banque de Règlement-DC/BR). The DC/BR
in cases of default. Trading operations are closed
has its headquarters in Abidjan and offices in all the
electronically on T+5 and will evolve towards closing
UEMOA member states. It centralizes issuances
on T+3 by the end of the year 2007.
3. Foreign Exchange The CFA Franc (XOF) is not traded on the foreign exchange markets but is fully convertible into the Euro, with the convertibility guaranteed by the French treasury through a special operations account at the Banque de France. This arrangement effectively offers practically unlimited overdraft facilities and allows the CFA states to avoid short-run balance of payments constraints. In return, the BCEAO is required to deposit 65% of its foreign exchange reserves at the central bank of
XOF per unit of USD (Year End)
France. Buying and selling rates of Euro are fixed at
800
XOF 655.957 / 1 EUR, and other currencies’ rates
750
are determined on the basis of the Euro rate on the
700
foreign exchange market. Payments and transfers of capital within the UEMOA zone and France are
650 600 550
unrestricted as are current account transactions.
500
The main restrictions concern the outflow of capital
450
to countries outside the WAEMU, which is subject to verification based on the submission of supporting
2000
2001
2002
2003
2004
2005
2006
Source: Bloomb erg
documentation.
4. Derivatives
ownership, particularly by French financial institutions.
The derivative market is in its infancy. Foreign
Foreign investors can purchase securities listed
exchange forwards exist with moderate liquidity and
on BRVM. For instance, an international non-
tenors extending up to 3-6 months.
governmental organization, Shelter Afrique, based in Nairobi (Kenya), has issued bonds and listed them on
5. Participation of Foreign Investors and Issuers
the BRVM.
The banking sector has a high level of foreign Non CFA Domiciled Issuers Title SHELTER-Afrique 6.25% 2003-2010 SHELTER Afrique 6% 2004-2009
Face Amount Year of Listing (XOF billion) Listed Bonds 3.50 2003 Private Placement Bonds 2.50 2004
Frequency
Expiration Date
Semi-annual
20-Feb-10
Semi-annual
26-Nov-09
40 – Cote d’Ivoire
6. Investment Taxation
7. Key Contacts
Government securities are tax-exempt as oppose
• Banque Centrale des Etats de
to non-governmental securities that are subject to a
• l’Afrique de l’Ouest
withholding tax (Impôt sur le Revenue des Valeurs
Mobilières-IRVM) applicable to income derived from these securities. The tax rates are the following:
Mailing Address: 01 BP 1769, Abidjan, Côte d’Ivoire
Other Address: Angle Boulevard
6% for interest income from bonds redeemable in
Botreau-Roussel/Avenue Delafosse,
less than five years, 10% for dividends paid out by
Plateau 01, Abidjan, Côte d’Ivoire
listed stocks and 12-18% for income from any other
Tel: +225-2020-8500
security.
Fax: +225-2022-2852
Web: www.bceao.int
• Bourse Régionale des Valeurs Mobiliéres
Mailing Address: BP 3802, Abidjan 01, Côte d’Ivoire
Other Address: 18, Avenue Joseph Anoma/ Rue des Banques, Abidjan, Côte d’Ivoire
D
Tel: +225-2032-6685
Fax: +225-2032-4777
E-mail:
[email protected]
Web: www.brvm.org
