Liberia
T
G
The IMF estimates the real effective
exchange rate to have increased by
25% since mid 2008 as a result of high
domestic inflation, determined mainly
by rising fuel and food prices.
The government has moved against
ad hoc tax exemptions, which favored
certain business people and distorted
competition. Yet a number of Fulbe
business people profited and – as mentioned above – the opposition suspects
the moves to be politically motivated.
he government has retained
both the U.S. dollar and the
Liberian dollar as legal tender.
The Central Bank of Liberia (CBL)
has maintained a near-stable exchange
rate since the Comprehensive Peace
Agreement.
With a high degree of dollarization
– the US dollar comprising 72% of
liquidity – the exchange cannot be
used as a policy tool to improve competitiveness given the adverse impact it
would have on local spending power.
According to the IMF, Liberia’s banking system remains capitalized and liquid. However, high non-performing
loans and low profitability put the
capital market at risk. Some banks
have fallen below capital requirements
as a result of bad loans, and the effectiveness of a commercial court mandated to improve asset recovery from
borrowers defaulting on loans was limited, with no responsibility for loans
approved prior to its establishment in
2012.
While the banking system has continued to grow, it is dominated by one
bank, which holds more than half of
the commercial bank demand deposits
and is responsible for approximately
40% of credit lent to the private sector.
Ivory Coast
Guinea
uinean exports are primarily
from mining (about 90% of
exports), and these exports
are traded at market rates. The same is
true of most imports, including petroleum products and consumer goods.
C
ote d’Ivoire is heavily reliant on
agriculture and its related activities engaging roughly 68%
of its population, its economy is highly
sensitive to the fluctuations in international prices of agriculture related products.
The banking system is far more professional than it was under the Condé
regime, and the number of regional
and international banks has increased
rapidly over the last decade. The presence of major mining multinationals
has forced this professionalization,
even against countervailing political
pressures.
Ivory Coast is the 7th biggest African
gold producer and accounted for 2%
of the continent’s gold. Cote d’Ivoire
is also an oil producer.Oil production
is expected to gradually overtake cocoa as the main source of exports, with
other non-cocoa exports (Palm oil etc.)
also performing well. Imports will rise
further as the economy expands rapidly
and government increases public investment.Ivory Coast could be seen as a
post crisis revival story. Obvious signs of
increase in FDI can be seen in the country, with China taking a keen interest (a
recent pledge of US$10bn, despite the
recent Chinese credit squeeze).
There is no published information on
the bank capital-to-assets ratio prevalent in Guinea, nor on the prevalence
of nonperforming loans.
Unfortunately it is a slave to key commodity prices which have great potential of being depressed in the short to
medium term.
The Condé government has worked
hard to contain inflation. The junta
had roughly doubled the money supply, simply having container loads of
banknotes printed and delivered from
China. This was a major inflationary
pressure. The Condé government used
a soft loan from the Republic of Congo to buy back many of these notes,
and the exchange rate of the Guinean
Franc has remained steady at about
7,000 GF to one US$.
In conclusion,the country has been
growing steadily. It has been projected a
growth rate of 9% and 10.1% in 2014.
A multi-billion USD financing for the
National Development Plan was secured at the Consultative Group meeting in Paris in Dec 2012, and authorities are predicting that this will establish
the beginning of prosperity for the
country. This including an increase in
public investments, a drive to develop
the agricultural, mining and oil and gas
sectors.
Annual GDP Forecaast Rates for MRU States 2014-2016
Data Sources:
1.World Bank
2. Index Mundi
3. IMF
4. ADB
5.Central Bank of Liberia
6. Central Bank of Ivory Coast
7.Central Intelligence Agency databaase
8.Afican Economic Outlook