Investment opportunities in Côte d’Ivoire’s transport sector

Recovering at pace from the global Covid-19 pandemic, Côte d’Ivoire’s transport and logistics sectors are now set to benefit from a wide range of new projects – from ports to airports and railways to motorways. The National Development Plan (Plan National de Développement, PND) 2021-25 seeks to almost double the level of economic investment outlined in its predecessor, the PND 2016-20, with the transport sector taking a crucial role in the roll out.

The private sector is key to these plans, and is expected to provide nearly three-quarters of the $105bn total investment the government is trying to mobilise for the new plan. Indeed, the third pillar of the six-pillar PND makes explicit reference to private sector involvement in transport. This has been widely welcomed by businesses and investors in the country, as the network in Côte d’Ivoire features bottlenecks and a lack of rapid connections between its ports, commercial and industrial zones, and rural areas.

With GDP growth averaging 8.3% per year between 2012 and 2019 – and the pandemic impacting Côte d’Ivoire less than many of its peers – economic development has occasionally outstripped the capacity of transport and logistics infrastructure. Getting the transport and logistics network in-step with the country’s burgeoning needs is more crucial than ever, creating major new opportunities for investors.

Structure & Oversight

The Ministry of Transport is the main body responsible for monitoring and implementing government policy in the sector, with Amadou Koné the minister of transport as of mid-2022. Other key participants in sector development include the Ministry of Road Equipment and Maintenance, led by Amedé Koffi Kouakou; the Ministry of Construction, Housing and Urban Development, led by Bruno Nabagné Koné; and the Ministry of Planning and Development (MPD), led by Kaba Nialé.

The Ministry of Transport has also a number of key sector outfits under its supervision, including Aeria, the management company for Côte d’Ivoire’s main international air gateway, Félix-Houphouët-Boigny Airport, also known as Port-Bouët, and Abidjan International Airport; and Air Côte d’Ivoire, the national flag carrier. Also under its remit are the Autonomous Port of San-Pédro (Port Autonome de San-Pédro, PASP); the Autonomous Port of Abidjan (Port Autonome d’Abidjan, PAA); vehicle testing and control agency SICTA; railway infrastructure management outfit the Ivorian Railway Heritage Management Company; the Abidjan transport firm Société des Transports Abidjanais (SOTRA); the Société d’Exploitation et de Développement Aéroportuaire, Aéronautique et Météorologue, which is responsible for airport development; the Office of Road Safety; the Transport Circulation Observatory, which surveys usage and fluidity; the Road Transport Development Fund; and the Agency for Road Infrastructure (Agence de Gestion des Routes, AGEROUTE).

In addition, the Ministry of Transport monitors private rail company Sitarail, which has the concession to operate the formerly state-owned railway from Abidjan to Ouagadougou, the capital of Burkina Faso. Sitarail is part of French conglomerate Bolloré, although in April 2022 it was in the process of being sold to the Italian-Swiss MSC, with the transfer expected to be complete by 2023. Bolloré was in the process of exiting its African transport and logistics operations in the first half of 2022, selling them to MSC. The Ministry also oversees the Ivorian Shippers’ Office, an organisation of importers and exporters using transport services, which also levies a tax paid by carriers transporting goods within the country.

Planning Head

The PND 2021-25 is a major focus for the sector, with 10% of the plan’s target investment going to transport. The MPD is the plan’s author, as well as its monitoring and managing agency.

Under the third pillar of the plan, which calls for private sector development and investment, a number of key performance indicators are given to the transport sector. First, the proportion of the population living fewer than 2 km from an all-season road should rise from 60% in 2020 to 75% by 2025. Second, the proportion of primary roads that are metalled should rise from 48% to 61% over the same period, while the total length of sealed roadway is expected to rise from 7500 km in 2020 to 9500 km by end-2025.

The plan also includes a number of projects involving mass transport. The first is the construction of the Abidjan Metro line from Anyama to Port-Bouët, a distance of around 37.4 km. Additionally, a railway line will be built between San-Pédro and Man, a length of 640 km; and lastly, the construction of an east-west bus rapid transit (BRT) line between Yopougon and Bingerville and a BRT line along Boulevard Latrille, part of Abidjan’s north-south roadway. These projects will join a range of works under way to improve transportation and logistics infrastructure, such as the expansion of the PAA with Côte d’Ivoire Terminal and expansion at the PASP, with plans also in place for the extension of the existing MSC container facility.

Performance & Size

Despite the global slowdown caused by the pandemic, Côte d’Ivoire’s transport sector has displayed a notably quick recovery. After shrinking by 1.8% in 2020, the latest figures from the MPD show transport growing by 11% in the first quarter of 2021 in terms of gross value added to GDP, and by 32.8% and 19.2% in the second and third quarters, respectively. Overall, this contributed 0.9 percentage points to the country’s 5% GDP growth in the third quarter of 2021. In its 2022 budget the government predicted sector growth of 8.2%, outstripping predicted overall GDP expansion of 6%.

Behind this resilience lies the strategic location, depth and history of transport connections both within Côte d’Ivoire and throughout West Africa. The rail link to neighbouring Burkina Faso was constructed between 1905 and 1954, while a road link, the TransWest African Coastal Highway connecting the country to Ghana, Togo, Benin and Nigeria has origins in a 1971 UN development plan. Roads also connect from this motorway to Burkina Faso and landlocked Mali. Furthermore, Côte d’Ivoire has four-lane highways linking the main industrial and commercial centre, Abidjan, to the capital, Yamoussoukro, and Grand Bassam on the south-east coast.

In terms of ports, the PAA and the PASP are major international shipping destinations, while three other ports – Sassandra, Dabou and Aboisso – serve mainly regional and local trade along the coast.

Meanwhile, Côte d’Ivoire has some 27 airports, although most serve internal flights only. The main international gateway is the Abidjan airport, which has regular services around Africa, and to Europe and the Middle East. Yamoussoukro also has an airport, as does the country’s second-largest port, San-Pédro, which conducts flights via San-Pédro airport.

Land

With more than half the country’s population urban dwellers – a figure likely to reach two-thirds by 2050 – and a rapid pace of economic growth, urban congestion issues have been a feature of life. Indeed, in 2021 sales of new vehicles rose by 57%, and this kind of rapid expansion created particularly acute challenges in Abidjan. The city is expected to reach a population of 10m by 2050, while by 2019 about 80% of all formal enterprises in the country were located there. As such, improving urban mobility is crucial to economic activity and general well-being. It is also key to climate change goals, with Côte d’Ivoire aiming to cut greenhouse gas emissions by 28% of their 2012 level by 2030. Greenhouse gas emission from road transport almost tripled between 2005 and 2016.

Recognising these challenges, the government is working to implement of its Abidjan Urban Transport Project (AUTP) 2017-21, in tandem with the greater Abidjan urban master plan. The Abidjan Metro is a substantial part of this and has become a priority in the PND 2021-25 and for the Ministry of Transport. Three French companies – Bouygues, Alstom and Keolis – have been building the Abidjan Metro’s first line, a 37.5-km, $1.5bn elevated rapid transit network line, since November 2017. Passenger services are expected to begin in 2022/23. The line is financed by France’s Treasury and the French Development Agency. It will connect 18 stations and seven municipalities in Abidjan, establishing a link between the Anyama centre in the north of the city and Abidjan airport and Port-Bouët. Daily traffic is expected to reach 500,000 people, creating around 2000 jobs.

The AUTP 2017-21 and the PND 2021-25 also list specific road development projects for Abidjan, with two BRT lines being created by the Abidjan Urban Mobility Project. The first, a Yopougon-Bingerville BRT route, is being implemented with financing of $300m from the World Bank. A 20-km separated bus lane will transport 175m passengers annually along this connection, with construction set to begin by end-2022 and completion expected in 2023/24. The project will also be a public-private partnership (PPP). The second, a 9.8-km BRT lane along Boulevard Latrille, saw SOTRA partner with Swedish commercial vehicle manufacturer Scania for 450 new buses and with Canada-headquartered Trapeze Group to install an intelligent transport system for their management. The project is expected to be completed in 2023.

Additionally, in January 2022 SOTRA announced it was partnering with Italian transport vehicle manufacturer IVECO to manufacture minibuses for the urban Gbaka and inter-urban Massa bus lines. Approximately 1000 of the 26-seater minibuses will be built for public transport and other specialist transport uses such as freight and ambulance.

Roadways

While these projects will improve mass transit, the new tolled motorway leading east out of Abidjan to Abengourou should ease transport in and out of d’Ivoire’s largest city. The three-lane motorway will cost some $93m, with financing from the government and the African Development Bank (AfDB). Côte d’Ivoire’s road links to its northern neighbours, Mali and Burkina Faso, have long been vital connections for these landlocked countries, although recent times have seen a number of growing security concerns over the frontier. A three-lane tolled motorway runs north to Yamoussoukro, after which metalled roads extend to Bouaké and Korhogo. This northern extension is being upgraded with the latest phase of the Autoroute du Nord project, with work under way on the Yamoussoukro-Tiébissou-Bouaké, Bouaké-Satama-Sokoura and Tiébissou-Sakassou-Béoumi stretches in March 2022.

Another international connection is also nearly set to come on-line – the Bomoko-San-Pédro corridor, linking the Malian capital to Côte d’Ivoire’s western port of the PASP. This 1000-km route is funded by the two countries’ governments, as well as the AfDB and the UEMOA, with construction commencing in 2016. As of mid-2021 the motorway was reported to be nearly 90% complete on the Côte d’Ivoire side.

Meanwhile, to the north-east – and the border with Liberia – the EU has funded €20.2m of the €53.2m Manu River Union Development and Transport Facilitation Programme to improve road crossings between the two countries, connecting to Liberia’s planned Sanniquellie dry port. Under the National Road Development Programme 2016-25, some $6.5bn will be injected into road repair and improvement, with key implementation bodies being AGEROUTE and the Road Transport Development Fund. One such project is a $550m rehabilitation of the 353.5-km AbidjanSan-Pédro coastal road. Work on this is due to complete in December 2022, in time for the 2023 Africa Cup of Nations, to be held in both cities.

In 2021 the Ministry of Transport adopted a fiveyear road safety strategy, targeting increased use of digital solutions for traffic monitoring, training and control. The strategy aims to reduce the road accident mortality rate by 50% by 2030.

Near the Liberian and Guinean borders, the city of Man is set to benefit from a $2bn, 640-km railway to the port of San-Pédro, financed by the Export-Import Bank of China. The line will primarily serve freight, connecting to mining and agricultural activities in the Man region. Once complete, the line will join the current rail portfolio, which includes the metregauge Abidjan-Kaya (Burkina Faso) railway. This carries approximately 200,000 passengers and 900,000 tonnes of freight per year and is operated by Sitarail.

Air & Sea

In recognition of growing demand, the Ministry of Transport has rolled out a programme aimed at enhancing domestic air transport links. It aims to boost Abidjan’s role as an international centre for pan-African air travel. The Félix-Houphouë tBoigny Airport was thus expanded in 2012, with annual passenger numbers doubling to 2.3m by 2019. A further expansion programme is under way, after the Ivorian and French governments signed an agreement in April 2021 to increase the airport’s annual capacity further to 5m passengers. Bringing in more visitors, Qatar Airways began a schedule of regular flights to the airport from Doha in mid-2021.

In 2016 the government approved a $1.8bn, 3700-ha Aérocité project to develop a new “aerotropolis” around the Félix-Houphouët-Boigny Airport, which will add hotels, industrial and commercial complexes, and residential districts to the area, further enhancing the airport’s regional and international status. As part of this development, in April 2022 it was announced that Bolloré would construct a new CFA3.4bn ($5.8m) logistics facility on a 9000-sq-metre area within the Aérocité zone. Set to be completed in September 2022, Bolloré plans to add pharmaceutical packaging facilities in the near future.

In February 2021 the national flag carrier, Air Côte d’Ivoire, took delivery of its first Airbus A320neo, as it continues its extensive upgrading and expansion programme. The new addition brought the airline’s fleet (58% government owned, 11% Air France-KLM owned and 23% owned by local consortium Golden Road) to four De Havilland Canada Dash-8 turboprops, three Airbus A3192 and two Airbus A320ceos. In addition, San-Pédro airport’s extension project, planned since 2014, was re-launched in 2020. Other regional airports are due for modernisation and expansion as the country seeks to develop its internal logistics.

Both of Côte d’Ivoire’s main ports – the PAA and the PASP – are undergoing significant expansion and upgrade programmes as Abidjan and San-Pédro vie for a larger share of regional trade. The cities are competing with a number of regional rivals who have recently challenged Côte d’Ivoire’s position as the key route to interior, land-locked neighbours such as Mali, Burkina Faso and Niger (see analysis).

Developing Logistics

As a key east-west and north-south West African transport corridor, Côte d’Ivoire has long been home to numerous logistics outfits. However, they continue to face challenges in reaching beyond the main motorways and conurbations. For example, a 2018 study of last mile by the US Agency for International Development discovered that only 7% of companies surveyed had warehousing or bases outside Abidjan, while approximately 64% of their land transport fleet consisted only of heavy trucks designed for shipping bulk cargo such as agricultural crops and mining, but unsuitable for moving fragile or sensitive goods.

Delivery times and costs can also be high, with a 2018 report by the Africa Transport Policy Programme suggesting the 1200-km Abidjan-Ouagadougou route was the most expensive in West and Central Africa, costing nearly $5100 to transport a single 20-foot container along its length. However, the report also stated that while 43% of Burkinabe companies owned just one truck, that figure was lower in Côte d’Ivoire, at just 15%. Indeed, Côte d’Ivoire now boasts a range of substantial logistics outfits, including DHL and MSC, Bolloré Transport & Logistics, Packing Service International, Alogistik, Côte d’Ivoire Logistique and Groupe Centaures. Many of these companies offer warehousing, road, rail, sea and air freight services, with some firms – such as Bolloré and MSC – also operating container terminals and dry port shipyards.

Yet, the informal sector continues to dominate, particularly in trucking operations. Raising the overall level of professionalism in the sector, many argue, is one way of bringing the informal sector into the formal one. Training and certification schemes for drivers and company operatives would boost regulation and quality, as would proper enforcement of standards, such as the Quality, Safety, Health and Environment certification currently required but ignored by many informal players. In turn, further regulation and professionalism would lead to the development of a more contemporary, integrated transport and logistics industry, boosting the range of ancillary contractors, uptake of digitisation and more efficient, cost-competitive solutions.

Outlook

With the government determined to keep up the pace of investment in transport infrastructure, using PPP as its preferred model, the years ahead will see plenty of new opportunities for transport and logistics companies to expand in Côte d’Ivoire. The country’s robust economic growth will also continue to drive demand. Outside the major centres, road networks require significant investment to accommodate such growth, with the PND 2021-25 aiming to meet this challenge. Ongoing upgrades and expansion of air and rail links, urban mass transport and ports all bode well for sustained growth.

Shifts in global supply chain mechanisms towards more local sourcing may benefit Côte d’Ivoire, as many ports see a downsize in vessel draughts and a move from container to bulk. Increased regional trade will also help ports such as the PAA and the PASP. Downside risks include recent hikes in global fuel prices and freight charges, which continued into the second half of 2022, along with supply chain bottlenecks caused by lockdowns in China. These factors will continue to impact sector players; however, the transport and logistics sector has repeatedly shown its resilience in the face of unexpected external headwinds.