Gbagbo Faces Financial Strangulation

Former International Monetary Fund director Alassane Ouattara is widely recognised as the winner of last month’s presidential run-off vote, but the incumbent Gbagbo has refused to leave office amid rising violence.

“It is necessary to maintain the pressure, even increasing it through the fact that the only valid banking signatory for the Ivorian state is Ouattara,” said French Foreign Minister Michele Alliot-Marie.France, the former colonial power, has called for Gbagbo to give up power by the end of the week.
The European Union is preparing sanctions against 18 of Gbagbo’s cronies, including freezing their personal bank accounts and issuing visa bans.

“Laurent Gbagbo faces measures which will gradually strangle him,” said a senior French official.

“Ouattara has started to name ambassadors, there are individual sanctions taken by the European Union, there is the closure of state accounts with the sole recognised signature, that of Alassane Ouattara,” he said.
The first goal of the campaign of financial strangulation is weakening Gbagbo’s grip on the military by rendering him unable to pay wages.

“It will take around a month for this recognition to produce concrete effects,” said the official.But experts warn that the process could be slow as Gbagbo likely possesses financial resources outside international controls, and sanctions may also increase his support among the population.

“In the case of the Gbagbo clan, the lesson since the start of this crisis is that external pressures are used as a political resource, turned upside down by the logic of ultra-nationalist sovereignty,” said Richard Banegas, a historian specialising in Ivory Coast.

“Laurent Gbagbo controls the production and exports of petroleum and cocoa (the country’s key crop). If one wants to suffocate the regime, it is necessary for example to consider a blockade of the port of Abidjan,” he said.

For Ouattara’s camp – and the international community – Gbagbo’s Achilles’ heel is banking, in particular its primary foreign currency account at West African Central Bank (BCEAO).

“All operations with the IMF, donors, foreign aid, pass through this account,” said a regional banking expert, who would not give his name.

“For example, development aid from France to Ivory Coast is paid into this account. This is also the case for funds linked to imports and exports, like taxes on cocoa or oil revenues.

“It’s a huge part of the budget,” he said.According to the expert, Ouattara’s camp has control of this account, but Gbagbo likely holds sufficient reserves in other accounts to cover the government payroll for this month.