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African states to hand over Ivory Coast finances

Category: General

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African states to hand over Ivory Coast finances



By Tom Burgis in Lagos
December 16 2010
The member states of West Africa’s common currency are planning to hand control of Ivory Coast’s finances to the opposition leader deemed to have won last month’s elections, undermining the defeated incumbent president whose refusal to yield power has plunged the country into crisis, according to European officials.
The move, expected to be approved as soon as next week, is designed to deny Laurent Gbagbo the funds he needs to prolong his 10-year rule in defiance of condemnation from African leaders, Europe, the US and the United Nations.
The decision to “sever Gbagbo’s access to credit and cash from the [regional central bank] is key in drying up the financial resources of Gbagbo and his capacity to pay off his supporters, [which is] vital for his staying power,” one European Union official told the Financial Times on condition of anonymity.
Heads of state from the west African monetary union – comprising Ivory Coast and seven of its neighbours – will recognise Alassane Ouattara as the legitimate president, handing his government a seat on the board of the central bank that controls the CFA franc, the officials said.
The rivals have both declared themselves president of the world’s biggest cocoa producer and formed governments, even though UN-verified results of polls late last month showed Mr Ouattara had won.
The currency is pegged to the euro and some of its reserves are held in France, a leading EU member and former colonial power in much of west Africa.
The EU is drawing up targeted sanctions against Mr Gbagbo and his allies and expects to complete a list of 18 or 19 names next week.
Along with France, Brussels has pressed the West African central to bank to act, one western diplomat said, echoing officials from the neighbouring countries keen to prevent Mr Gbagbo from stoking renewed conflict in their midst.
Mr Ouattara has called for the regional central bank to recognise him but there are concerns in some quarters that depriving Mr Gbagbo of the means to pay salaries to civil servants and the army – which has to date remained loyal to him – would be a high-risk strategy.
The post-election stand-off erupted into violence on Thursday when pro-Ouattara groups seeking to answer their leader’s call to take over the state broadcaster were repelled by security forces. Some nine people were killed, Amnesty International said.
Ecowas, the regional body, and the African Union have suspended Ivory Coast while Mr Gbagbo remains in power.
One Ivorian financier said the move could be crucial to forcing Mr Gbagbo from office.
But he added that Mr Gbagbo might still have access to the part of the foreign reserves held in Abidjan, the commercial capital, as well as cocoa revenues.
Contacted by the FT, the West African central bank’s headquarters in Senegal said no one was available to comment on Thursday evening. The Burkina Faso-based commission of the West African Monetary and Economic Union could not be reached for comment.
Tom Burgis
West Africa correspondent
Financial Times


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