Francophone West Africa Business Forecast Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	58
ISBN Number	1758-5066
Product Code	BMI03955

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Summary

This report assesses the economic and political impact of the global recession on Francophone West Africa's major economies. As energy prices are likely to remain subdued over the course of 2009 and 2010, the region's largest oil and gas producers are set to see a significant slowdown in economic activity, with Equatorial Guinea's real GDP expected to contract by over 4.0% this year. In clear contrast, countries with a strong dependence on the agricultural sector, in particular Cte d'Ivoire, are likely to weather the global storm and will continue to generate positive growth numbers over the coming two years. While only a minority of countries in Francophone West Africa are projected to experience a full-year contraction, worsening economic conditions and upcoming elections are likely to take their toll on political stability, with the risk of popular unrest increasing in Cameroon, Mauritania, Senegal and Gabon.

Social tensions on the back of rising food prices in 2008 could erupt again in Cameroon, with warning signs emerging that the government's plans to boost the agricultural sector have been ineffective. That said, despite the risk of violent unrest, we believe President Paul Biya's regime remains firmly in control of the country, and only a severe recession lasting well into the election season in 2011 could significantly darken the ruling party's prospects of re-election. While the outlook for the Cameroonian economy has worsened since our last report, we still believe the country will be on the path to recovery by then, after growth bottoms out at 0.5% in 2009.

Following the cancellation of Cte d'Ivoire's presidential ballot at the end of 2008, the threat of a collapse in the peace process has increased significantly. While the government has set a new election date of November 2009, the risks to political reconciliation and economic recovery will remain considerable. This is because we believe the government and the former rebels will continue to face significant obstacles in their efforts to hold a peaceful ballot. The repercussions for political stability, economic activity and the business environment are likely to be severe should the country fail to successfully conclude the elections later in the year.

Following the rapid decline in oil prices, we believe Gabon's real GDP growth will decelerate sharply in 2009, although we expect the country to narrowly escape a full-year recession. More importantly, President Bongo's deteriorating health has raised questions over Gabon's longerterm stability. While the ruling Gabonese Democratic Party (PDG)'s power over state institutions is deeply entrenched (President Bongo's son is heading the Defence Ministry), we maintain our view that there are potential risks to political stability going forward. This is mainly because Bongo has ruled the country for more than 40 years and his sudden departure as head of state threatens to leave a power vacuum, which could potentially intensify divisions within the PDG and lead to an internal power struggle.

Content

BMI Risk Ratings - Africa Executive Summary
- Coming To Terms With The Global Recession
Chapter 1: Country Focus
- Cote d'Ivoire
- Domestic Politics
- The Long And Bumpy Road To The Polls
- The free and fair national elections, which are the 2007 peace accord's fundamental objective, are still not imminent
- Economic Activity
- Political Uncertainty A Drag On Growth
- Against a backdrop of ongoing political uncertainty and weaker cocoa output, Cote d'Ivoire's economy will remain below its true growth potential over the coming years
- 10-Year Forecast
- The Cote d'Ivoire Economy To 2018
- Economic Recovery Contingent On Political Stability
- Barring a collapse in political stability, we believe that Cote d'Ivoire's economy is likely to recover noticeably over the next ten years, thanks to the country's dominant primary sector
- Business Environment
- Business Environment Outlook
- Institutions
- Infrastructure
- Market Orientation
- Operational Risk
Chapter 2: Country Reports
- Cameroon
- Domestic Politics
- Domestic Policy: The Politics of Drift
- A stagnation of economic growth this year, combined with elevated local food prices, means that there is significant potential for further political violence
- Economic Activity
- Gabon
- Domestic Politics
- The End Of Franafrique?
- While investigations by a French court into Gabonese President Omar Bongo's personal wealth could lead to a diplomatic fallout, we do not expect a complete breakdown of relations, as pragmatism and Real Politik are expected to persevere over the longer term
- Economic Activity
- Senegal
- Domestic Politics
- Wade Dynasty Under Pressure
- The defeat of the SOPI coalition (an alliance of the ruling Senegalese Democratic Party and smaller parties) in recent local polls represented the biggest political setback for President Abdoulaye Wade since his election in 2000
- Equatorial Guinea
- Economic Activity
- Squeezed By Production Shortfalls
- With energy prices and oil production under pressure, we believe Equatorial Guinea's economy will experience a full-year recession in both 2009 and 2010
- Mauritania
- Domestic Politics
- Little Hopes For Successful Election
- With the military and opposition parties at loggerheads, we believe there are significant risks that the presidential elections will be delayed beyond June 6 2009
- Republic Of Congo
- Economic Activity
- Weathering The Global Storm
- With oil making up an estimated 70% of GDP by output, 91% of exports and the source of 81% of fiscal revenues, the Republic of Congo is a familiar oil story
- Niger
- Domestic Politics
- Landmark Rebel Meeting, But Domestic Discontent
- Moves by President Mamadou Tandja to resolve the Tuareg rebellion since it erupted again in 2007 are an encouraging step towards improving security in the country, and the two main rebel groups have agreed a ceasefire
Chapter 3: Special Report
- The Outlook For Global Banking
- Business Environment Rating Outlook
Chapter 4: BMI Global Assumptions
- Global Assumptions
List of Tables
- Table: Cote d'Ivoire - Political Overview
- Table: ECONOMIC ACTIVIT Y
- Table: COTE D'IVOIRE Long-Term Macroeconomic Forecasts
- Table: BMI BUSINESS AND OPERATIONA L RISK RATIN GS
- Table: BMI LEGAL FRAMEWORK RATIN GS
- Table: Middle East & Africa Annual FDI Inflows
- Table: TOP EXPORT DESTINATIONS
- Table: BMI TRADE RATIN GS
- Table: CA MEROON - ECONOMIC ACTIVIT Y
- Table: ECONOMIC ACTIVIT Y
- Table: SENEGAL - ECONOMIC ACTIVIT Y
- Table: EQUATORIA L GUINEA - ECONOMIC ACTIVIT Y
- Table: MAURITANIA - ECONOMIC ACTIVIT Y
- Table: CONGO - ECONOMIC ACTIVIT Y
- Table: LOAN -TO-DEPOSIT RATIOS , Selected States
- Table: LOAN GRO WTH (% CHG Y-O-Y), Selected States
- Table: COMMERCIA L BANKING BUSINESS ENVIRON MENT RATIN GS, SELECTED STATES
- Table: GLOBAL ASSUMPTIONS
- Table: GLOBAL & REGIONAL REAL GDP GRO WTH
- Table: EMERGING MARKETS
- Table: COMMODITIES