The Boom Of The Digital Economy In Ivory Coast
The authorities plan to double the digital share of Côte d’Ivoire’s GDP by 2020. An ambitious goal driven by a favorable economic and fiscal environment.
15%: Côte d’Ivoire’s share of GDP should represent the digital economy by 2020. An ambitious goal, unveiled last April by Daniel Kablan Duncan, the Ivorian vice-president, according to whom “Côte d’Ivoire, in the field of ICT (Information and Communication Technologies), has made enormous progress”. Progress that does not seem to stop, the ICT sector holding “undeniably a huge potential,” welcomed the leader.
ICTs already account for 7% of Ivory Coast’s GDP
In fact, Côte d’Ivoire has no reason to be ashamed of its digital performances. In the ICT sector, the country ranks 8th in Africa and 74th in the world. Indeed, the ICT sector generates “10 million customers for mobile money and 17 billion CFA francs of daily transactions currently, thus increasing the financial banking rate of our country”, also welcomed Daniel Kablan Duncan.
Today, the digital sector already contributes up to 7% of Ivorian GDP, according to the French Tech Abidjan, a platform that works for the promotion of ICT. It brings about 530 million euros to the state, or 13% of its tax and parafiscal revenues. In addition, “the digital sector and new technologies in Côte d’Ivoire is growing strongly (7% to 9% per year), with a sustained level of investment, estimated at 113 billion euros over the last five years years, “according to French Tech Abidjan.
A true regional locomotive, “Côte d’Ivoire has had the most dynamic economy in West Africa for five years, with an average growth rate of almost 9%,” says Benin’s economist Jean-Baptiste. Djohy, consultant to the West African Economic and Monetary Union (WAEMU). “Fifteen years ago, agriculture dominated the economies of UEMOA member countries. But today, it is the tertiary sector that is driving growth, “analyzes Mr. Djohy.
In Côte d’Ivoire, the tertiary sector contributes more than 45% of GDP, compared to 35% for the primary sector. “This is largely due to the development of the digital sector and its ripple effects in other sub-sectors in Côte d’Ivoire since the end of the political crisis in 2011” and the presidency of Alassane Ouattara, the economist continues.
Many advantages for start-ups
For the digital sector to reach 15% of Ivorian GDP by 2020, it is still necessary that the tax and financing accompany this rise. This is the task that the government of Côte d’Ivoire has set itself to facilitate the launch of innovative start-ups. They can now set up in the free zone of biotechnology and ICT, near Abidjan, where they benefit from an exemption from taxes and duties, subject to an annual fee of 2.5%. on their turnover.
To raise money, Ivorian start-ups can turn to private equity funds, some of which are exclusively dedicated to African start-ups. Côte d’Ivoire also plans to reduce the tax burden on bank loan interest and is already among the top 10 African countries attracting the most funding for start-ups.
The country also has an attractive holding regime, with a corporate tax rate of 25%, the lowest in the sub-region, and a low tax on dividends and interest paid by the holding company. Lastly, capital gains on the sale of securities are subject to a reduced rate of 12% (instead of 25%), or even totally exempt if the portfolio of the holding company is composed of at least 60% of interests in companies having their headquarters in one of the WAEMU countries.