USA Africa Dialogue Series - Gbagbo Seizes Banks And Continues His Killing Spree

Government in Ivory Coast Seizes Banks

By REUTERS

Published: February 17, 2011

ABIDJAN, Ivory Coast (Reuters) — Laurent Gbagbo, the strongman who refuses to step down despite losing a presidential election in November, said Thursday that major banks that had suspended business in Ivory Coast would be nationalized.

The announcement is the latest turn in a bitter struggle for political control of the West African country.

The banking system in Ivory Coast, the world's top cocoa grower, has been heading toward collapse this week, with virtually all commercial banks shutting down and others swamped by customers trying to withdraw savings.

The bank closings are a result of international sanctions intended to squeeze Mr. Gbagbo of financing and to force him to acknowledge the results of the presidential election on Nov. 28, which were certified by the United Nations and showed that the winner was his opponent, Alassane Ouattara.

In a statement issued after a cabinet meeting on Thursday, Mr. Gbagbo's government said he had ordered "that the Ivorian state take control, via a total and complete stakeholding in the capital of these banks."

The statement referred to the country's biggest bank, a unit of Société Générale of France, which suspended business on Thursday as part of an exodus of foreign banks. It also cited a unit of another French bank, BNP Paribas, as well as Standard Chartered. The statement also named "City Bank," apparently a reference to Citibank, which also shut down its unit in the country.

The power struggle between supporters of Mr. Gbagbo and Mr. Ouattara has begun to affect the country's economy, as sanctions imposed by the European Union and the United States on Mr. Gbagbo for refusing to cede power start to bite.

"It means there is no properly functioning banking system anymore," Samir Gadio, an analyst with Standard Bank, said of the spate of closures, which could make it hard for Mr. Gbagbo to pay public-sector and army wages this month.

About 300 people have been killed during the standoff.