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Ivory Coast's largest bank closes, crisis deepens

 Cocoa growers protest an export ban on cocoa in front of European Union headquarters in Abidjan, Ivory Coast Thursday, Feb. 17, 2011. Ivory Coast's b...
 Cocoa growers protest an export ban by burning sacs of cocoa beans in front of the European Union office in Abidjan, Ivory Coast Thursday, Feb. 17, 2...

Ivory Coast Banks

Cocoa growers protest an export ban on cocoa in front of European Union headquarters in Abidjan, Ivory Coast Thursday, Feb. 17, 2011. Ivory Coast's b...

Ivory Coast Banks

Cocoa growers protest an export ban by burning sacs of cocoa beans in front of the European Union office in Abidjan, Ivory Coast Thursday, Feb. 17, 2...

Nine banks, including Ivory Coast's largest, shut down their operations one after another Thursday, further squeezing the country's strongman who is refusing to leave office nearly three months after being declared the loser of the presidential election.
Together, the financial institutions halting operations this week hold the vast majority of civil servant bank accounts in the West African country. The move is expected to prevent almost all government employees from receiving their salaries. Panicked people gathered in lines desperately seeking to take out their savings in fear of a cash shortage.
The international community had said it would use financial sanctions to dislodge sitting president Laurent Gbagbo, who is refusing to step down although results issued by his country's election commission and certified by the United Nations showed he had lost the Nov. 28 ballot by nearly 9 percentage points. Among the sanctions slapped on Gbagbo's regime was the revocation of his signature on state accounts at the regional central bank which prints the currency used in Ivory Coast.
Once that happened late last month, the Gbagbo government was no longer able to make deposits into the private banks where government salaries are cashed.
Private banks began shutting down earlier in the week starting with Britain's Standard Chartered, France's BNP-Paribas, Nigeria's Access bank and U.S. bank Citibank. They were joined Thursday by France's Societe Generale, the country's largest financial institution, which announced it was shuttering all 47 branches of its local subsidiary serving 230,000 clients.
"The bank is no longer in a position to ensure high quality, secure operating conditions for its clients," Societe Generale said in a statement. "We are no longer able to ensure the short term supply of currency/cash to our branches."
Over the course of the day Thursday, four smaller Ivorian banks also shut their doors, citing technical difficulties.
"A kind of psychosis has set in," insurance broker Jean-Claude Eddie said. "People are flocking to the few banks that are still open, and all this demand cannot be met. It's the beginning of a crisis."
Diplomats and analysts have been wagering that once civil servants stop receiving their pay, they will defect en masse away from Gbagbo. He is still backed by the army which has brutally cracked down on supporters of opposition leader Alassane Ouattara, who has been unable to assume office even though he is internationally recognized as the winner of the vote.
Every month since the contested election, observers have been closely watching to see if state employees are paid _ but so far Gbagbo appears to have made payroll.
He was initially able to because the governor of the central bank is an ally and refused to seal off Gbagbo's access to the accounts. The governor was fired last month and the flow of cash was stopped. And insiders say Gbagbo has also used proceeds from the state-controlled cocoa sector to make ends meet. But a ban on cocoa exports has been in effect for several weeks now, and is also beginning to be felt.
Ouattara has been forced to begin his term inside a U.N.-guarded hotel. His prime minister Guillaume Soro has been touring African capitals attempting to shore up support. Although Ouattara has been recognized by governments around the world including the U.S., the European Union and the African Union, there are disagreements over whether military force should be used to oust the recalcitrant leader.
Next week, a panel of five African presidents will travel to Ivory Coast on behalf of the African Union to try to persuade Gbagbo to step down. On Thursday during a stop in Senegal, Soro told reporters that its time for the Ivorian people to rise up Egypt-style.
"We don't need the African Union ... In Egypt, was the African Union there? Was there a panel of heads of state there? It was the Egyptians that chased Mubarak out .... Gbagbo isn't stronger than Mubarak," said Soro. "The people of Ivory Coast need to do launch their own revolution."
In Ivory Coast, the stepped up financial pressure is starting to spill over into protests. Several hundred angry cocoa farmers set piles of cocoa beans on fire in front of the European Union office in Abidjan on Thursday, protesting sanctions put in place by the international community to try to force Gbagbo out. They say the sanctions have instead paralyzed the industry in the world's largest cocoa grower.
"We aren't politicians, we're farmers," said Patrick Ayemou, a cocoa farmer from the Sud Comoe region. "We own this cocoa, and the European Union shouldn't confuse politicians and farmers. Because of the EU's embargo, we can't live off the fruits of our labor."
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Rukmini Callimachi reported from Dakar, Senegal.


Updated : 2021-10-21 14:29 GMT+08:00