Gbagbo to take control of banks amid panic

February 18, 2011 12:00 am

, ABIDJAN, Feb 18 – Ivory Coast strongman Laurent Gbagbo said Thursday he would take control of two French bank affiliates that closed due to the post-election crisis as residents began a run on banks over fears of more closures.

After at least five international banks suspended activities this week, Gbagbo "has issued decrees so that the state of Ivory Coast can take total and complete control of the capital of certain banks", spokesman Ahoua Don Mello said in reading a statement on public television RTI.

He noted in particular the affiliates of French banks BNP Paribas and Societe Generale.

Earlier Thursday dozens of people anxiously lined up outside bank branches in the Plateau business district of Abidjan waiting to withdraw funds.

"I\’d rather have my money in reach, nobody knows what will happen," a soldier in the queue in front of the Moroccan-owned Societe Ivoirienne de Banque told an AFP reporter.

Five foreign banks have closed their offices in Ivory Coast amid a cash crisis caused by sanctions taken by the West African central bank, the BCEAO, against the government of Gbagbo, who has refused to step down following November\’s election.

The Dakar-based BCEAO, the central bank for countries using the CFA franc, has cut links with Gbagbo and choked off funding since the international community recognised his rival Alassane Ouattara as the winner of the presidential run-off poll.

Another mission by five African presidents to break the impasse is set to take place on Monday and received a strong endorsement from UN Secretary General Ban Ki-moon.

"The secretary-general urges all Ivorian parties to extend their full cooperation to the high-level panel and to create a political and security environment conducive to the success of the panel\’s efforts," Ban said in a statement Thursday.

The panel representing Africa\’s five regions is chaired by President Mohamed Ould Abdel Aziz of Mauritania and includes Jacob Zuma of South Africa, Idriss Deby of Chad, Jakaya Kikwete of Tanzania and Blaise Compaore of Burkina Faso.

On Thursday the local subsidiary of French giant Societe Generale, the SGBCI, one of the largest operators in the country\’s banking sector, shut down joining British bank Standard Chartered, French BNP Paribas affiliate BICICI and US Citibank.

The moves come as a heavy blow to this west African country which, despite years of unrest, remains the regional powerhouse.

"The other banks will close," a senior member of the sector predicted.

Many believe that at least in the short term, only Ivorian establishments will remain open.

Last week the BCEAO warned that banks dealing with Gbagbo\’s regime could face sanctions including being excluded from the region\’s clearing system.

European sanctions have also piled on the economic pressure, notably those that target the country\’s two ports.

On Thursday, Ouattara\’s prime minister Guillaume Soro urged Ivorians to stage a people\’s revolution in the style of Egypt and Tunisia rather than waiting for African leaders to resolve the crisis.

Soro also laid the blame for the country\’s economic woes squarely on Gbagbo, accusing him of "scorched earth tactics".

The country\’s financial difficulties have extended far beyond its banking sector; businesses have scrapped contracts, cut social services and temporarily laid off workers.

"All the sectors of activity, notably in transportation and industry," are being hit, said a member of the country\’s agro-industry.

With banking activities grounded, the effect will be "cataclysmic", a industry member predicted.

Gbagbo officials have singled out French banks for particular criticism, dusting off old anti-colonial discourse.

But the French government has defended the banks\’ decision to suspend activities here as "appropriate measures" given Gbagbo\’s refusal to leave power.

Analysts and diplomats say Gbagbo is beginning to feel the pinch of international sanctions and is struggling to find cash to pay civil servants and troops whose loyalty he depends on.

Gbagbo has "been putting enormous pressure" on local subsidiaries of international banks, several banking sources said.

But members of Ouattara\’s camp are also anxious about the potential fallout of the economic squeeze.

"Gbagbo is going to turn the population against us," a senior Ouattara aid warned.


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