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Country Commercial Guides FY 1999: Cote d'Ivoire

 


VIII. TRADE AND PROJECT FINANCING

1. The Banking System


Cote d'Ivoire is a member of the Communaute Financiere Africaine, 
a financial grouping of Francophone African countries.  Within 
that grouping, it belongs to the Union Economique et Monetaire de 
l'Afrique de l'Ouest (UEMOA). The BCEAO, located in Dakar, is the 
central bank for UEMOA members.  The currency issued by the 
BCEAO, the CFA franc, is convertible against the French franc at 
a rate of 100:1; convertibility is guaranteed by the French 
Treasury.  

There are 11 commercial banks in operation and they are listed in 
rank order with their correspondent U.S. Banks in Section 6 
below.  A small stock exchange is scheduled to operate as a 
regional stock exchange early 1999, and over 30 insurance 
companies and the African Development Bank are headquartered in 
Abidjan.  The World Bank and the International Finance 
Corporation also maintain regional offices.

2. Foreign Exchange Controls Affecting Trading

Exchange controls within Cote d'Ivoire are administered by the 
Directorate of External Finance and Credit.  According to Ivorian 
law, all exchange transactions relating to foreign countries must 
be handled by authorized banks or the Postal Administration.  If 
an imported item has a value in excess of approximately CFA/F 
500,000 (CFA/F 600 equals 1 US) the transaction must involve an 
Ivorian bank. Transactions involving goods valued at less than 
this amount must be handled by an authorized Ivorian bank if a 
financial transaction is to be undertaken before customs 
clearance.   Import attestations allow importers to purchase any 
necessary foreign exchange, but no earlier than eight days before 
the scheduled shipment of the goods.  All foreign exchange to be 
used for import payment must be purchased either on the date of 
settlement specified in the commercial contract, or at the time 
when the required down payment is made.

French Franc based-transactions are the easiest and most common. 
 Dollar-based transactions may take longer.  The fees associated 
with processing exchange transactions are high and vary slightly 
between banks. Proof of an importing transaction is required to 
remit payments for imports denominated in other currencies.  

3. General Finance Availability



Commercial lenders tend to rely more on collateral than on 
prospective income and cash flow.  Financing is generally 
available for short term, (one year or less) private sector 
projects.  After the devaluation, in an effort to control the 
inflationary impact of devaluation, interest rates were high.  
Since the devaluation, flight capital has returned, the liquidity 
within the system has increased substantially, and inflation has 
been on a declining trend.  All these factors have led to single-
digit interest rates, for the first time in years.  Banks 
continue, however, to extend credit only to a limited group of 
borrowers who are deemed good credit risks.  The current lending 
rate ranges from 15 to 17 percent.  Medium to long-term public 
sector projects are financed by multilateral lending institutions 
such as the World Bank or the African Development Bank or by 
European foreign aid programs, rather than by commercial banks. 

4. How to Finance Exports/Methods of Payment

Traditional trade finance instruments such as letters of credit, 
collections, and funds transfer are available to the exporter 
but, the associated fees are high compared to other regions.  If 
a letter of credit is chosen, the exporter should require an 
irrevocable, confirmed letter of credit to ensure prompt, 
reliable payment.  The OPIC/Citibank African Trade Facility of US 
100 million is available.  The Cote d'Ivoire country limit is US 
10 million. 

The USDA's West Africa Regional GSM-102 Credit Guarantee Program 
provides access to financing for imports of wheat, rice, feed 
grains, vegetable oil, protein meal, livestock genetics , forest 
products,  and dairy products.  The payment guarantee to the U.S. 
exporter is for a minimum of 90 days and a maximum of one year.  
The guarantor banks in Cote d'Ivoire are Citibank, N.A and 
BICICI.  The country limit for Cote d'Ivoire is US 25 million.  
The GSM-102 program is generally available only to high quality 
importers with a good credit history and substantial assets with 
the guarantor bank.

5. Types of Available Export Financing and Insurance

For private sector projects, the Overseas Private Investment 
Corporation (OPIC), a Washington-based U.S. Government agency, 
offers U.S. exporter financing and insurance programs.  OPIC's 
programs include loans, loan guarantees and insurance products.  
The Export Import Bank of the United States (Eximbank) does not 
lend to the public sector at this time.  However, Eximbank is 
open for short- and medium-term  private sector transactions.  If 
Cote d'Ivoire's rating were to change, in addition to short and 
medium term loan guarantees, Eximbank has a Direct Loan Program 
that would offer foreign buyers medium and long-term loans for up 
to 85 percent of the contract price at fixed interest rates for 
the purchase of U.S. capital equipment and services that face 
officially subsidized foreign competition.

The U.S. Trade and Development Agency, the World Bank and the 
African Development Bank offer funds to finance feasibility 
studies and loans to finance Ivorian Government-sponsored 
procurement. 

6. List of Banks with Correspondent U.S. Bank Arrangements

SGBCI              Societe Generale de Banques (SGB)
BIAO               Credit Commercial de France (CCF)
BICICI             Banquet Nationale de Paris (BNP)
SIB                Credit Lyonnais
Citibank           Citibank
Banquet Atlantique Credit Industriel et Commercial (CIC) et de
                   l'Union Europeenne, New York
Paribas            Paribas
BHCI               None
Ecobank            Chase Manhattan, and Bankers Trust, New York
Bank of Africa     None
Belgolaise/COBACI  Barclays -New York