Friday, February 18, 2011

Ivory Coast banks close, people line up for cash

The three-month long political crisis in Ivory Coast is turning into financial crisis as five banks closed this week in the West African nation, namely, Access Bank, BNP Paribas, Citibank, Societe Generale, and Standard Chartered have halted operations in a report from Bloomberg.
The economy of the world's biggest cocoa producer is on the verge of bankruptcy as a result of leadership tug of war between incumbent Laurent Gbagbo and the internationally recognized election winner, Alassane Ouattara.
Bank customers in the economic capital Abidjan queued up trying to withdraw cash in some branches that are still open.
Following Gbagbo's sequestration of the financial institutions, the Central Bank of West African States has demanded them to stop doing business.
In addition, Outtara told companies not to pay taxes to the incumbent administration. He called on cocoa and coffee suppliers to freeze exports for 30 days in an effort to deplete the 65-year-old Gbagbo of resources.
The incumbent government will pursue "judicial proceedings" versus BNP and Citigroup for closing their branches, according to Gbagbo's justice ministry on 15 February, which may drive away foreign investors "after the government defaulted on $2.3 billion of Eurobonds this month."
Details of this story here.

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