While developing countries and the donor community have in recent years placed considerable emphasis on strengthening access to financial services and the design of national financial inclusion strategies, the traditional role of finance in allocating scarce resources to their most productive uses has attracted less attention. The Africa Long-Term Finance (LTF) Initiative seeks to rebalance the focus towards this perspective by: (a) assembling data and establishing a “LTF Scoreboard” where individual countries are benchmarked against one another as regards the availability of LTF; and (b) undertaking country diagnostics in a number of African countries to identify specific hurdles faced in deepening markets for LTF and ways such hurdles can be overcome. This report is the first of these country- diagnostic reports.
The present country report on Côte d’Ivoire focuses on infrastructure, housing and enterprise finance. It applies a flexible definition of LTF reflecting the differing productive life of assets being financed, which may vary from 20 to 30 years in the infrastructure and housing sectors to 5 years or less for enterprises. Gaps in the provision of LTF arise due to the varied maturities available to those financing investments in these sectors. Long-term funding for infrastructure in Africa is predominantly provided by circumventing the domestic intermediation process altogether – using long-term funds provided by governments, donors or in the form of foreign borrowing or direct investment. Enterprises, particularly if small and medium-sized, face serious challenges in accessing adequate and affordable long-term financial resources. Rather than funding themselves on formal markets through bank loans or the issuance of debt and equity, SMEs rely on funding provided by family and friends, even though such funding is unlikely to be sufficient in terms of size and maturity to satisfy their investment needs. Housing finance is found to be scarce, too short-term and therefore unaffordable for many households, leading to incremental construction.
The main authors of this report are Michael Fuchs, Olivier Hassler, Franz le Lesle, Dianne Rudo and Makaio Witte. The assessment is based on mission work undertaken in January 2018 as well as shorter visits undertaken in September 2017 and October 2018. The report benefited from inputs from Thierry Kangoye (AfDB), Thouraya Triki (AfDB), Evans Osano (FSDA), Vimal Parmer (FSDA), Thorsten Beck (Cass Business School) and Makhtar Gueye (Lion’s Head). The report was written under the overall guidance of Mark Napier (FSDA) and Wolfgang Buecker (GIZ).
The project was undertaken with the support of
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