Business

Ivory Coast government takes control of foreign banks

  • 17 February 2011
  • From the section Business
People wait in line on 16 February 2011 in front of a branch of the pan-African bank Ecobank in Abidjan
Ivory Coast's banking system is barely functioning as the political crisis deepens

Ivory Coast's authorities say they have taken control of foreign banks who suspended operations in the troubled country.

Laurent Gbagbo's government said he had decreed a takeover of the banks.

Major banks, including Standard Chartered, BNP Paribas, Societe Generale and Citibank this week suspended operations there.

This follows sanctions aimed at forcing Mr Gbagbo to accept that Alassane Ouattara had won last year's election.

The UN-backed election commission named Mr Ouattara as the winner but the result was reversed by the Constitutional Council and Mr Gbagbo remains in power.

A government statement issued after a cabinet meeting said: "The President Laurent Gbagbo... has made a decree that the Ivorian state take control, via a total and complete stakeholding in the capital of these banks."

Paralysed banks

The banking sector is all but paralysed although Mr Gbagbo has managed to keep paying the salaries of government workers and the army - despite sanctions invalidating his signature on state accounts at the regional central bank that prints the country's money.

That move meant the Gbagbo government could no longer make deposits into the private banks where government salaries are cashed.

Earlier the BBC's correspondent in the country said most cash machines in Abidjan are now empty or out of action, and for several weeks it has been almost impossible to cash cheques, he says.

Citibank is the largest corporate financier of Ivory Coast's oil and gas operations and the third biggest cocoa exporter financier, although it has no retail branches.

Cocoa

Cocoa exporters are also refusing to co-operate with the regime.

Ivory Coast is the biggest cocoa producer in the world and the price of cocoa has been trading at its highest levels for a year.

Exporters have stopped registering new beans for export as a result of the sanctions, as well as a ban called for by Mr Ouattara.

Mr Gbagbo had previously ordered the seizure of all local branches of the Central Bank of West African States (BCEAO).

Ivory Coast is part of the eight-country West African CFA monetary zone, with a single central bank based in Dakar in Senegal, but with national headquarters in each country.

Next week, a panel of five African presidents will travel to Ivory Coast on behalf of the African Union to try to persuade Mr Gbagbo to step down.

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