Côte d’Ivoire Entrepreneurs Look Toward the Future

ABIDJAN, December 9, 2013 - Rama Cereal, a small family business created in Abidjan in 2008 that processes grains into meal or flour, has just pulled off quite a feat. Thanks to the high quality of its products, it was chosen to furnish samples to a Nestlé laboratory on a regular basis.

Aramatou Coulibaly, Rama Cereal’s director, attributes this success in some part to a loan of about 30 million CFA francs (US$69,500) from the Small and Medium Enterprise (SME) Revitalization and Governance Fund,[i] financed by the World Bank and implemented by the Côte d’Ivoire Export Promotion Agency. The funding enabled the business to design more sophisticated packaging, computerize its accounting system, and create a website. Most important, it was able to integrate essential hygiene practices while upgrading its processing, a meaningful step for Nestlé, the reigning multinational in the grain market.

“Thanks to this loan we landed a contract we wouldn’t have dared to dream of a few years ago,” says Coulibaly. The contract has allowed her to hire four new employees, for a total of twenty-three. And the benefits extend beyond the economic realm: “Seventy percent of our employees are women who don’t know how to read, and who had no awareness of basic hygiene measures for processing grain. Today, all of them use these practices. The women are grateful for the additional training about hygiene and food, because they use this knowledge at home,” Coulibaly adds.

Seeing the results of these investments, Rama Cereal has begun to think big. The business now hopes to expand its production capacity, setting its sights on servicing markets throughout the region and in Europe. 

Quality was the top priority for the Abobo Health Clinic, too. When Dr. Ahui, the clinic’s director, and his team learned about the SME Revitalization and Governance Fund, they saw an opportunity to expand the clinic’s activities. In 2010, they invested 30 million CFAF (half of it provided by the Fund) in quality assessment in order to conform to ISO 9001/2008 (an international standard that sets criteria for quality-management systems). “Support from the Fund gave us a new understanding of the possibilities. It encouraged us to keep up our investments the following year, which were 10 times higher than the initial aid furnished by the World Bank,” says Dr. Ahui. The improvement in quality of the clinic’s services led to a remarkable rise in its overall revenue, which went from 25 million CFAF (US$51,600) in 2010 to 56 million CFAF (US$115,600) in 2012.

A mutual fund to alleviate businesses’ debt

The SME Revitalization Fund also led to the creation of a cooperative Microfinance Center (MFC), a mutual fund to provide credit and financing for SMEs. Its purpose is to alleviate an obstacle to businesses’ cash flow by buying up their debt claims on the State of Côte d’Ivoire. The state then reimburses the World Bank directly for the debt amount. Concurrently, twice the debt figure is paid into the coop and becomes capital stock. On the request of a coop member, the MFC may grant a loan allowing the participant to acquire new contracts. 

For Mr. Assohoun, director of the construction firm ETCB, business matters brightened considerably with the creation of the MFC. The company’s main client, the State of Côte d’Ivoire, had not paid its bills in over a year. This prevented the business from paying off its own debts, and thus from receiving new loans. Thanks to the MFC, not only was ETCB’s debt cleared, but the firm also received a loan for 10 million CFAF (US$20,600). “The debt buyout was a huge relief for us. It allowed us to take on new commissions in 2011,” Mr. Assohoun explains. Today, unfortunately, ETCB is faced by another delay in payment by the State. In this situation, the MFC cannot grant new loans, but it has restructured the payment plan for the first debt to make it viable for the business.

An “efficient and speedy” business court

Another essential component of the SME Revitalization Fund is the creation of a business court. Prior to this, contract disputes were handled by the business division of trial court. Under that system. cases took too long to process. Moreover, certain highly complex cases required judges specialized in commercial affairs, but no such specialists were on hand in trial court.

From its inception in October 2012, the court established strong credibility within judicial and business milieus. In the words of Dr. François Komoin, its presiding judge, “Although the decisions obviously can’t please everyone, the majority of economic stakeholders who come to the business court are very glad it exists. I often hear that its work is efficient and speedy.”

            The court’s decisions are published on its website, a major factor in maintaining transparency in its functioning. Dr. Komoin takes note of these achievements but maintains his focus on the many improvements to be made. He would like cases to move faster, without sacrificing quality in the process. Ideally, he says, the current time frame of two months for a judgment  would be reduced to a maximum of 30 to 45 days. Off to a flying start, the court aims to keep up the momentum. To this end, it has entered into a partnership with the commerce court of Angoulême, France, to exchange experience and best practices.

[i]  The Revitalization and Governance Fund represents about 1.2 billion CFA francs. The project’s aim is to restimulate Côte d’Ivoire businesses by bolstering their capabilities in the realms of management, production processes, technology, and commerce/marketing activities. On October 31, 2013, one hundred businesses obtained financing and 1,168 jobs were created. Candidate entrepreneurs must specify their priorities for the use of funds: taking part in international exhibits related to their field, purchasing materials, advertising, and so on. Among the strategic priorities is the introduction or improvement of quality control.