Nigeria Content Online

Two
large international banks suspended operations in Cote d’Ivoire on
Monday as a power struggle following a disputed presidential election
tightened its grip on the economy of the world’s top cocoa grower.

French bank, BNP
Paribas’s Ivorian unit, the second biggest banking operation in the
country, was closed due to security concerns, an official said.

Citibank also said
it would be closed on yesterday, giving no official reason but saying it
would continue to monitor the situation.

BNP Paribas and
Societe Generale have around two thirds of the Cote d’Ivoire market.
Citibank is a smaller operation with no retail arm but is the largest
corporate financer for Cote d’Ivoire’s oil and gas operations, the main
creditor of its 80,000 barrel a day refinery and the third biggest cocoa
exporter financer.

The West African
nation has been in turmoil since a disputed November 28 presidential
election between incumbent Laurent Gbagbo and rival Alassane Ouattara.
Gbagbo’s planning minister condemned the bank closures and said they
were breaking the law.

United
Nations-certified election commission results named Ouattara the winner,
but the result was reversed by a pro-Gbagbo legal body and the
incumbent remains in power despite international sanctions and threats
of military force.

“The entire BICICI
network is closed until further notice. The head office in Paris
informed us of this decision yesterday at around 2300 (GMT). I’m staying
home today,” the official, who could not be named because of death
threats against other banking staff, told Reuters.

A spokesperson for Citi in Paris said the bank was closed on Monday and the bank was monitoring the situation.

The power struggle
has hit the banking sector as Ouattara, backed by western nations and
regional bodies, try to cut Gbagbo’s access to funds to force him from
power. West Africa’s monetary union last month cut off his access to
state accounts at West Africa’s BCEAO central bank.

“It was becoming
very difficult for those banks to operate in Ivory Coast because they
can’t use the BCEAO platform any more,” Standard Bank analyst, Samir
Gadio, told Reuters.

Gadio said that
procedures that usually took an hour were now taking up to eight days,
and added that there was a “reputational risk if they continue to
operate in Ivory Coast … (and are) seen as allowing Gbagbo’s regime to
survive”.

Endgame?

Western nations have slapped travel bans and sanctions on a range of individuals and organisations backing Gbagbo.

Cocoa exporters have
stopped registering new beans for export as a result of the sanctions,
and a ban called for by Ouattara. Cocoa futures touched their highest
levels in over a year on Monday as fears grew that the ban, initially
put in place on January 24 for one month, would be extended.

But Ouattara remains
trapped in a lagoon-side Abidjan hotel, protected by U.N. peacekeepers
while Gbagbo, who has the backing of the military, remains in control of
government buildings.

“The government
condemns the illegal character of this decision … By proceeding with
their closure, BICICI and Citibank are … seriously contravening their
obligations under banking law. (We) will not tolerate these acts of
defiance,” budget minister, Kone Katinan, said on state TV.

After being cut off
from the regional bank, Gbagbo sent soldiers to seize its Abidjan unit
and appropriate local reserves, forcing the bank to close its Cote
d’Ivoire operations completely and causing problems with liquidity and
cheque clearing.

Banking sources say
the military has since intimidated banks into participating in a new
clearing system set up in the building Gbagbo seized. Some have received
death threats.

“Gbagbo is not going
to leave just because the banking system has shut down … he will
leave the day his life is at stake,” Gadio said.

“But this is going to speed up the endgame. I don’t see how the salaries are going to get paid,” he added.