From 1976 to 1980, factors such as a boom-bust in coffee and cocoa prices, over-investment funded by foreign debt, and a devaluation of the US Dollar led Ivory Coast to the brink of financial crisis.
Decreased revenues from coffee and cocoa exports continued into the 80's and early 90's, increasing the burden of foreign debt and eventually requiring lender negotiation.
In 1994, the economy began a comeback due to devaluation of the CFA franc, increased export revenues, financial reforms, and debt rescheduling.
[2] Agricultural output of cash crops expanded, and, as evidence of diversification, the relative importance of unprocessed coffee, cocoa, and timber diminished as that of bananas, cotton, rubber, palm oil, and sugar grew.
[2] The government, which had responded to the boom phase by vigorously expanding public investment, was by 1979 forced to rely on foreign borrowing to sustain growth.
[2] At the same time, the declining value of the United States dollar, the currency in which Ivory Coast's loans were denominated, and rising prices for imported oil adversely affected the country's current account balance.
[3] Foreign donors, attracted by Ivory Coast's stable political climate and profitable investment opportunities, provided capital for these endeavors.
[3] Until 1979, when coffee and cocoa prices plummeted and the cost of petroleum products rose sharply for a second time, virtually every economic indicator was favorable.
[3] First, the emergence of a domestic market large enough to allow manufacturers of import substitutes to benefit from economies of scale required a wage for agricultural workers—the largest segment of the labor force—that was high enough to support mass consumption.
[3] The investment code also permitted vast sums to leave Ivory Coast in the form of tax-free profits, salary remittances, and repatriated capital.
[5] In the 1980s, a combination of drought, low commodity prices, and rapidly rising debt costs exacerbated the structural weakness of the Ivoirian economy.
[5] Between 1977 and 1981, both cocoa and coffee prices fell on world markets, the current accounts balance dropped precipitously, and debt servicing costs rose, compelling the government to implement stabilization policies imposed by the International Monetary Fund (IMF).
[5] The economy sagged even more when a drought in the 1983-84 growing season cut agricultural and hydroelectric output at the same time as rising interest rates on international markets increased the debt burden.
[5] Between 1984 and 1986, a surge in commodity prices and output, coupled with increased support from Western financial institutions, provided a momentary economic boost.
[5] The record 1985 cocoa crop of 580,000 tons, combined with improved prices for coffee and cotton, bolstered export earnings and confidence in the economy.
[5] Similarly, lower costs for oil imports helped the country attain a large commercial surplus by the end of 1986, thus considerably easing the balance of payments difficulties experienced earlier in the decade.
[8] In the mid-1980s, the government also implemented a program to modernize its import substitution industries and further expand exports to include processed foods, textiles, wood, and such nonagricultural products as building materials, chemicals, and electronics.
[4] The Ivorian economy as of the late 1980s was in a downward spiral, primarily because world prices for coffee and cocoa, the country's two principal exports, remained low.
[4] After several years of lagging performance, the Ivorian economy began a comeback in 1994, due to the devaluation of the CFA franc and improved prices for cocoa and coffee, growth in non-traditional primary exports such as pineapples and rubber, limited trade and banking liberalization, offshore oil and gas discoveries, and generous external financing and debt rescheduling by multilateral lenders and France.
[citation needed] In 1999, a coup d'état triggered a series of political crises and armed conflicts lasting until 2011,[9] which disrupted the country's economy.