Ivory Coast slashes budget on low cocoa prices, President Says

ABIDJAN (Capital Markets in Africa) – Ivory Coast has cut planned spending for 2017 by 10 percent due to a sharp drop in world prices of cocoa, its leading export, President Alassane Ouattara said, according to Thursday’s edition of national newspaper Le Patriote.

The move is a major concession by a government that has prided itself on its stewardship of the West African country – the world’s biggest cocoa exporter – during its recovery from a 2011 civil war.

It has since emerged as one of the world’s fastest growing economies, drawing the interest of international investors.

Ouattara, in a speech at the presidency, said the decision to cut spending was taken during a visit this month by an International Monetary Fund delegation, according to excerpts published by the newspaper.

“Excluding salaries, we were obliged to reduce spending by 10 percent. All the ministries will tell you their budgets have been reduced by 5 to 10 percent,” Ouattara said.

The investment budget was included and would be reduced by 10 percent, or about 200 billion CFA francs ($320 million).

Cocoa futures have plummeted since last year on the back of bumper crops around the world and stagnant demand.

New York cocoa futures slumped to a 9-1/2-year low on Wednesday, and the London market dropped to its lowest since 2013.