Ivory Coast: Gbagbo to Seize Banks while Cocoa Surges

January 26th, 2011
in econ_news

Ivory Coast Abidjan Map Econintersect:  This week the defeated (November election) president of Ivory Coast, Laurent Gbagbo, was cut off from income from cocoa exports and lost an ally at the regional central bank, Philipe-Henri Dacoury-Tabley, who had been allowing the defeated president continued access to the accounts, despite the decision, originally made in December by regional finance ministers, to cut him off.

Follow up:

Alassane Ouattara, the man the United Nations, the African Union and other foreign powers say defeated Mr. Gbagbo, remains blockaded in a hotel by Mr. Gbagbo’s security forces, even as new sanctions and financial pressures rain down almost daily on Mr. Gbagbo.

A Gbagbo spokesman, finance minister of the defeated government,  the regional central bank’s branches in Ivory Coast, including the central one in the commercial capital of Abidjan, would be “requisitioned, along with the staff.”

The Gbagbo claim that the money he has been cut off from is needed "to pay pensions" is actually needed to pay security forces that are preventing a change of government.

Mr. Gbagbo’s finance minister announced on state television Tuesday night that the bank’s branches in Ivory Coast, including the central one in the commercial capital of Abidjan, would be “requisitioned, along with the staff.” The minister, Desire Dallo, said the move was prompted by the need to pay state pensions, adding that the decision to bar Mr. Gbagbo from access to the bank was “criminal.”

Meanwhile cocoa and chocolate prices continue to rise, up 9.9% from last Friday's low (1/21/11) to a high of $3,395 earlier today (1/26/11) for the New York March futures contract.  The March NY contract for cocoa has risen 24% (12/1/10 low) in New York since the Nov. 28 elections and 20% from the low on January 7.

The ban may send prices to as high as $3,720 a metric ton, a Bloomberg survey of six analysts showed. That would be the highest since the all-time high in January 1979.   Ivory Coast's production is valued at about $3.9 billion at current prices, Bloomberg calculations show.   

Sources:  GEI News, New York Times, Bloomberg Business Week and Reuters.

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