Housing Investment Landscapes CÔTE D’IVOIRE

Introduction:

After 10 years of political unrest, Côte d’Ivoire has undergone housing reforms and is now one of the fastest
growing economies in the region along with Nigeria and Ghana. Côte d’Ivoire is a member of the West African Economic Monetary Union (WAEMU), an eight-country customs and currency union in which all members use the CFA franc (CFA). Unlike the Central African Economic and Monetary Community (CEMAC), the WAEMU zone maintained strong economic growth (6.6 percent in 2017), driven by stronger economic activity in Côte d’Ivoire and Senegal. Côte d’Ivoire’s GDP grew on average by 9 percent a year between 2012 and 2015. Since President Alassane Ouattara was elected in 2010, the country has experienced a period of political stability, but many social challenges remain. According to the government’s most recent survey (ENSESI 2016), unemployment in Côte d’Ivoire is falling, from 6.1 percent in 2012 to only 2.8 percent in 2016.

However, those figures are contested and other figures are put forward (70 to 90 percent), including by the African Development Bank (AfDB). This is because different indicators are being used and these indicators do or do not account for informal and precarious employment. The country also suffered from severe lack of infrastructure investment during the 10 years of the crisis. To reduce this deficit of infrastructure, the newly elected government established a Plan de Développement National for 2012-2015. Shortly after, the presidency launched its social housing program to tackle the affordable housing deficit in Côte d’Ivoire, emphasising the lack of supply.

Local institutional investors:

Capital markets:

Foreign companies can invest in and list on the regional stock exchange for WAEMU countries, the Bourse Régionale des Valeurs Mobilières (BRVM), which is based in Abidjan. In 2018, the BRVM celebrated 20 years of operation. The BVRM has a market capitalization of US$15 billion with 39 companies listed and is largely dominated by Ivoirian and Senegalese firms. The BRVM is regulated by the Regional Council for Savings Investments (Conseil Régional de l’Epargne Publique et des Marchés Financiers, CREPMF). Côte d’Ivoire has 34 companies listed on the BRVM, including banks, telecommunications, energy and food companies, making it the leading country in the region, followed by Senegal with only three companies listed.

Pension funds:

The insurance market is the largest of the region and grew by 8.6 percent in 2016, according to the Association of Insurance Companies (Association des sociétés d’assurance de Côte d’Ivoire, ASA-CI). The two public funds are the National Social Insurance Fund (CNPS) for the private sector and CGRAE for the public sector. In June 2017, CNPS acquired a stake in Eranove, which is active in the energy sector. Previously, CNPS also became a shareholder of two banks, Société Générale and Attijariwafa Bank, and several investment funds (Amethis, Yelen and AfricInvest). Côte d’Ivoire’s pension funds could invest in more real estate and housing projects. CNPS is increasingly diversifying its assets, including in the real estate and housing sectors with the construction of 32 residential buildings in Cocody totaling 384 units.

Domestic Private Equity:

The number of private equity funds based in Côte d’Ivoire has increased significantly, from two to 15 in the last 10 years.4 Among these, the most important are AfricInvest, Amethis Finance, Adenia Partners, AFIG Funds and Emerging Capital Partners. More recently, in September 2017, Investisseurs & Partenaires (I&P) created the fund Comoé Capital, which will be entirely dedicated to SMEs, with the objective of raising an initial €7 million (US$8.2 million). Half of private equity transactions in West Africa are registered in Côte d’Ivoire. In 2017, private equity funds based in Côte d’Ivoire joined forces to create the Ivorian Association of Capital Investors. According to the association, the total amount invested by the funds based in Côte d’Ivoire is €280 million (US$330 million).

Banque de l’Habitat de Côte d’Ivoire (BHCI):

The Banque de l’Habitat de Côte d’Ivoire (BHCI) was created in 1994 to finance the supply and the demand sides of affordable housing. In 2016, BHCI’s market share in the housing loan market was 15 percent (CFA 7 billion/US$12.25 million).5 BHCI is not a CRRH shareholder. After several years of crisis, BHCI was privatized in 2017 – the Ivorian state sold all its shares (51.6 percent) to the Canadian group Westbridge Mortgage – and is now Banque Habitat Afrique (BHA). The bank’s other shareholders are the West African Development Bank (BOAD), the property developer SCI Demack, and the insurance groups NSIA and Somavie.

DFI investment in finance and housing:

DFIs have invested heavily in Côte d’Ivoire, particularly in the financial and banking sector and in supporting SMEs. Main donors are the World Bank and the AFD.

Investment activity in housing:

This section presents the different investment tools used to support and expand the housing and housing finance sectors.

Top performing investment tools:

DFIs have made major loans and given lines of credit to banking institutions and MFIs for the expansion of their financial products. Debt makes up more than half of the investments. The table below represents the distribution of investment instruments by number of investments.

Conclusion:

Another obstacle to the development of affordable housing mentioned by private developers through the National Chamber of Builders and Developers (CNCP) is land issues. Housing developers blame administration slowness and delays, particularly in delivering the arrêtés de concession définitive (ACD). The ACD was introduced in 2013 and is the only document that confirms property ownership. It requires nine steps and many participants: the Guichet Unique at CEPIPI, the land registry, the cadastre, and the Ministry of Construction. Developers have been critical of the 78-day delay to get the ACD set by the Ministry of Construction and Urban Planning, saying it is not fully respected. They also criticize the high cost of ACD (CFA 91 000, or US$160), which goes up to CFA 300 000 (US$525) with associated fees.

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