A Pioneering Path: How Côte d’Ivoire is Reshaping Debt Management to Invest in Human Capital

Before the Covid-19 pandemic swept across the globe, Côte d’Ivoire stood out as one of Africa’s fastest-growing economies. From 2012 to 2019, the nation boasted an annual growth rate of 8%, fueled by sound economic policies and a period of relative political stability. The benefits were tangible: poverty rates fell from 44% to 39.5%, and the country made strides in education and health, increasing its Human Capital Index (HCI) score from 0.30 to 0.38 over the past decade.

However, these national achievements often contrast sharply with the realities in rural areas. Take Assoum 2, a small village nestled in the far northeastern corner of the country, near the border with Burkina Faso. For years, children attended classes in a cramped and deteriorating three-room school building. That changed recently with the inauguration of a new four-classroom building, a preschool, and latrines.

To build on progress in places like Assoum 2 and tackle broader national challenges, Côte d’Ivoire is launching an innovative debt-for-development swap supported by the World Bank Group. This new initiative will enable the country to swap existing, costly debt for a loan with better terms. The savings will be reinvested in the construction of over 30 schools, easing fiscal pressures while improving access to education.

Tackling a Daunting Challenge

Nationwide, only one in ten children in Côte d’Ivoire has access to preschool—far below the Sub-Saharan African average of 28%. While gender parity exists in enrollment, stark inequalities remain between urban and rural communities. Urban areas dominate preschool access, hosting 62% of facilities and enrolling 74% of children.

The pressures on Côte d’Ivoire’s education system are immense, driven by a population that grows at 2.6% annually. The government’s 2015 policy mandating compulsory education for children aged 6 to 16 has further amplified the demand for schools, classrooms, teachers, and basic facilities. In response, the government partnered with the World Bank in 2022 on a $350-million Education Sector Program for Development, prioritizing efficiency and regional equity.

Progress in Assoum 2 shows what could be possible in the rest of the country.

Enrollment at the school has also surged from 136 to 290 students.

The hope is that the new debt-swap operation will enable the country to meet its growing education demand by freeing up fiscal space to invest in schools. The swap is also part of a broader strategy to improve fiscal resilience and strengthen Côte d’Ivoire’s debt profile. Enabled by a €500 million policy-based guarantee, half of this amount will support the debt swap, while the remainder will secure a Sustainability Linked-Loan to attract environmentally and socially conscious investors. The dual approach not only reduces the debt burden of the country but also creates long-term financial sustainability.

Through bold policies and innovative financial tools, Côte d’Ivoire is transforming its debt into a vehicle for opportunity— setting a precedent that could inspire other nations across the continent.