Political Instability and Investment Risk in African Markets: Tidjane Thiam’s Exclusion as a Barometer for Governance in Ivory Coast

In the intricate landscape of African markets, political stability and governance quality remain pivotal determinants of investment risk. Nowhere is this dynamic more evident than in Ivory Coast, where the legal and political challenges faced by Tidjane Thiam—a prominent opposition leader and former banking executive—serve as a microcosm of broader governance concerns. Thiam’s exclusion from the 2025 presidential race, following a retroactive court ruling that stripped him of Ivorian citizenship due to prior French nationality, underscores the fragility of democratic institutions and the potential for political maneuvering to undermine electoral competition [1]. This case, coupled with the marginalization of other key opposition figures like Laurent Gbagbo and Guillaume Soro, raises critical questions about the health of democracy in a country that has otherwise demonstrated economic resilience [3].

The Thiam Case: A Governance Red Flag

Thiam’s legal battle highlights systemic issues in Ivory Coast’s political framework. Despite relinquishing his French citizenship in March 2025, the court’s retroactive application of citizenship laws rendered his actions too late to qualify for the presidency [2]. This outcome reflects a lack of clarity in legal processes and a perceived bias in judicial rulings, which could deter foreign investors seeking predictable regulatory environments. As noted by Reuters, Thiam’s exclusion has been framed by his camp as a politically motivated move to consolidate power under President Alassane Ouattara, a narrative that resonates with broader concerns about limited political inclusivity [6].

Such governance challenges are not isolated. The BTI 2024 report emphasizes that Ivory Coast’s democratic institutions lack vertical and horizontal accountability, with power concentrated in the executive branch [2]. While the government has invested heavily in infrastructure and economic reforms—projects that have attracted foreign direct investment (FDI)—these gains are offset by bureaucratic inefficiencies, corruption, and an opaque tax system [3]. For instance, the 2024 U.S. Investment Climate Statement notes that U.S. firms operating in Ivory Coast frequently cite slow government decision-making as a barrier to investment [3].

Investment Risks: Balancing Growth and Uncertainty

Ivory Coast’s economy, projected to grow at 6.5% annually from 2024 to 2026, remains a cornerstone of West African economic integration [3]. The country’s strategic infrastructure projects, such as the Port of San Pedro and renewable energy initiatives, have drawn FDI inflows, particularly in agriculture, mining, and energy sectors [4]. However, political instability and governance risks temper long-term optimism.

The exclusion of credible opposition candidates like Thiam signals a potential erosion of democratic norms, which could destabilize the country ahead of the 2025 election. A contested election or perceived electoral fraud might trigger social unrest, disrupting business operations and deterring capital inflows [4]. Moreover, trade policy uncertainty (TPU) across Africa—exacerbated by regional conflicts and inconsistent regulatory frameworks—poses an indirect threat to Ivory Coast’s economic stability [2].

Opportunities Amid Challenges

Despite these risks, Ivory Coast’s National Development Plan (2025–2030) offers a roadmap for economic diversification, emphasizing value-added processing and renewable energy [1]. The government’s digitization of public administration and IMF-backed reforms to strengthen fiscal policies further bolster investor confidence [3]. For example, the discovery of gas and petroleum reserves, coupled with investments in a 46 MW biomass power plant, positions Ivory Coast as a regional energy hub [3].

However, realizing these opportunities requires addressing governance shortcomings. As the Heritage Foundation’s Index of Economic Freedom notes, Ivory Coast’s score of 57.8 ranks it 101st globally, with significant room for improvement in government integrity and regulatory efficiency [4]. Investors must weigh the country’s growth potential against the risks of political instability, particularly in sectors reliant on public-private partnerships or long-term policy continuity.

Conclusion

Tidjane Thiam’s legal and political challenges encapsulate the dual-edged nature of investment in Ivory Coast. While the country’s economic resilience and infrastructure investments present compelling opportunities, governance issues—exemplified by the exclusion of opposition leaders—pose persistent risks. For African markets, Ivory Coast serves as a cautionary tale: political instability, even in the shadow of economic growth, can erode democratic resilience and deter long-term investment. Investors must navigate this landscape with a nuanced understanding of both the opportunities and the fragility of the political environment.

Source:
[1] Ivory Coast's Political Turmoil: The Impact of Tidjane Thiam's Exclusion on Democracy Ahead of the 2025 Elections [https://thesouthernafricantimes.com/breaking-news/ivory-coasts-political-turmoil-the-impact-of-tidjane-thiams-exclusion-on-democracy-ahead-of-the-2025-elections/]
[2] Ex-banker Thiam Drops French Nationality in Bid for Ivory Coast Presidency [https://www.reuters.com/world/africa/ex-banker-thiam-drops-french-nationality-bid-ivory-coast-presidency-2025-03-20/]
[3] 2024 Investment Climate Statements: Côte d'Ivoire [https://www.state.gov/reports/2024-investment-climate-statements/cote-divoire]
[4] Index of Economic Freedom: Côte d'Ivoire [https://www.heritage.org/index/pages/country-pages/cote-divoire]