Cote d’Ivoire Deep Dive Part III: An ecosystem as an image of the country. Unstructured but full of potential
March 4, 2024
Abderrahmane Chaoui

Cote d’ Ivoire’s ecosystem can become a vital driver of tech-supported growth within the broader African tech ecosystem, but challenges remain.

Welcome to Part III of our four-part Deep Dive into the Cote d’Ivoire tech ecosystem. In Part II, we delved into d’Ivoire’s post-independence history, heavily influenced by the French colonial experience and Felix Houphouët-Boigny keeping Cote d’Ivoire close to its former colonisers. Following Houphouët-Boigny’s death, internal unrest ensued until 2011, when Alassane Ouattara came to power. This is where we resume our story, with the development of the Cote d’Ivoire tech ecosystem coming to the fore.

Alassane Ouattara built on Felix Houphouët-Boigny’s bet that maintaining unity and stability in the country was a vital step to economic prosperity. His efforts in preserving peace coincided again with an economic rebound. Cote d’Ivoire entered a 6-year period with a steady 8% growth rate between 2011 and 2017 that rhymed with strengthened investments, a reinforcement of the private sector and a diversification of Cote d’Ivoire’s agricultural products, with the country becoming the world’s leading producer of cashew nuts.

The diaspora’s outsized role in Cote d’Ivoire

Yet, in 2012 and at the beginning of its third period of sustained growth, 60% of the population was illiterate, while there were 1.5 doctors per 10,000 inhabitants. Life expectancy did not exceed 55 years. Again, growth without development. Beyond the illiteracy rate, which characterises the inequality gap among the population, the country’s education system has fallen behind international and even regional standards, struggling to build the skills that Cote d’Ivoire needs for its development.

As a result, most corporations in the country turn towards the Ivorian diaspora in Europe (France especially) or from the region (Senegal, Mali, Burkina Faso) to hire executives.

This lack of human capacity-building capability is also reflected in the country’s ecosystem. There is an overwhelming majority of expat founders who have, in recent years, been joined by a restrained club of diaspora founders educated abroad. Both these groups also turn towards expat executives to manage their ventures in key strategic positions.

The inefficiency of the education system in Cote d’Ivoire is also reflected in the quality of the country’s scientific research and its broader innovation capabilities. The number of publications and their quality, with Cote d’Ivoire ranked 120th by the Global Innovation Index on its published scientific and technical articles, and the lack of investments in R&D and research considerably reduces the country’s innovation capacity. Only two companies operate in Deep Tech, both with intellectual property acquired from or developed in another country. As such, both Cote d’Ivoire’s entrepreneurial and innovation capacities are seriously hindered by its inability to transform its education system and produce local talent.

Following the country’s long tradition of state liberalism and openness to foreign trade and foreign businesses, the Ivorian ecosystem’s emergence is a lagging indicator of these conditions and long-awaited. The first building blocks of the ecosystem were laid down by international organisations such as Seedstars, who opened the first coworking space in Abidjan in 2012 and implemented some of its programs, raising awareness and stimulating the not-even-nascent ecosystem at the time.

Extract from Sendemo’s discovery report on Cote d’Ivoire that ou can download here

Seedstarts was later joined by other international organisations (Founders Institute, Impact Hub Abidjan) and startups such as Jumia, who were creating the basic business infrastructure (market education, logistics, payments etc.) for startups to emerge in the country. These changes, as is so often the case in Africa’s different ecosystems, came alongside telcos such as Orange and MTN bringing mobile money technology to the country. Therefore, Coet d’Ivore’s ecosystem has followed an unstructured bottom-up developmental path, mostly carried by international organisations, individuals and corporates.

It was around 2018 that things started to accelerate for Cote d’Ivoire’s ecosystem, with the first wave of private investors showing interest in funding and building the ecosystem’s startup scene (Saviu, Comoé Capital, Janngo, Brightmore Capital). These investors were later joined by DFIs and donor agencies such as Proparco, GIZ and I&P, extending their focus to entrepreneurship. The favourable regulatory framework for foreign investments, low taxation system and the macroeconomic outlook (+8% growth rate) convinced VCs from abroad and the region to consider Cote d’Ivoire as the ideal hub for regional activity. As such, LoftyInc Capital, an international VC with an impressive track record on the continent (Andela, Flutterwave, Wave, Anka, etc.), has recently opened shop in the country.

Freestyle development with little government involvement…until now

Both the building and the development of Cote d’Ivoire’s ecosystem followed a freestyle trajectory, with no state interventionism whatsoever until very recently. Bureaucracy at the highest government levels, with overlapping mandates between ministries (industry, tertiary education and research, private sector, telecommunications) and internal fights over budgets and scope of activity, has delayed the elaboration of a national strategy. No agency or organisation has taken the lead in coordinating the different efforts from private and public spheres or creating the incentive framework to attract what is missing to the country’s ecosystem.

Around 2018, a group of local founders emerged, known as the CI20, to lobby the highest executive levels of government to ease the tax and regulation burden for startups. Despite having a legal framework that incentivises foreign investments, the rule of law, along with bureaucracy, trade taxes and regulation, bureaucracy is still hindering private sector development.

A Startup Act was in talks for several years before it was finally implemented and put on display at VivaTech 2023, where the country had a booth for the first time and could steal the spotlight from its Senegalese neighbour for a day. A few months after this signing, the Ministry of Information Communication and Digital Economy (MICEN), which was responsible for the drafting and promotion of PADS (the Startup Act by another name) changed leadership and was restructured for the fifth time since 2019.

Nonetheless, and even if the text does not yet cover all aspects that stakeholders on the ground were requesting, especially related to tax exemptions and other specific incentives, a general strategy has been articulated. This strategy is centred on enhancing the framework for public-private partnerships, a strong industry focus on “Industry 4.0” and Pepite 2030, a capacity reinforcement program for a handpicked portfolio of local SMEs with high export potential.

This marks a good place to conclude Part III of our Deep Dive into the Cote d’Ivoire ecosystem. In our fourth and final part, we will consider the current shape of the Cote d’Ivoire ecosystem, its players, its role in the broader regional ecosystem, and its future growth potential.

Abderrahmane Chaoui is an African ecosystem researcher, consultant, and writer.

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