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Bills pile up in Côte d’Ivoire as seat stays empty

By Anansi
Posted on Wednesday, 2 February 2011 17:51

As the economic screw tightens on Côte d’Ivoire, the options will become starker: serious negotiations, or economic chaos.

Join in our debate on whether African Union troops should be sent in to resolve electoral disputes.

The outcome of Côte d’Ivoire’s ongoing drama, with two parallel governments vying for supremacy in Abidjan, will depend on economics as much as political strategy. Ivorians are caught in a battle of budgets: one controlled by Alasanne Ouattara (declared winner of the November presidential elections by the UN-backed Commission Electorale Indépendante) and the other by Laurent Gbagbo (named winner by his allies in the Conseil Constitutionnel).?

On 31 January, Côte d’Ivoire defaulted on a $29m interest payment deadline for its $2.3bn Eurobond. Foreign affairs minister Alcide Djedje pledged to pay the debtors, but did not specify when.

The World Bank, IMF and African Development Bank have frozen lending while Gbagbo remains in power. More immediately, his survival depends on his ability to pay the army and special forces. Ouattara’s officials claim Gbagbo paid only CFA35bn ($70m) of the CFA80bn monthly wage bill. Some analysts reckon the Gbagbo camp could raise enough for salaries through customs duties on cocoa and petroleum for perhaps three months.?

Although Gbagbo’s supporters make much of his nationalist and anti-French stance, the regime signed a multimillion-dollar deepwater oil contract with Total two months before the elections. France still contributes 60% of foreign investment – including contracts for ports, oil production and telecommunications. Gbagbo’s failure to bring in alternative investors from the Middle East and Asia has weakened his negotiating position. However Russia’s Lukoil has been a lifeline to Camp Gbagbo. Along with Angola and Israel, the country has been its bedrock in terms of financial support.?

The Banque Centrale des États de l’Afrique de l’Ouest (BCEAO) sent a powerful message when it barred the regime from accessing national reserves, and instead recognised Ouattara as legitimate president. What difference this makes on the ground is unclear: the national treasury remains under Gbagbo’s control. BCEAO Dakar officials cannot force national banks, which operate as intermediaries for the regional bank, to transfer funds to Côte d’Ivoire’s BCEAO account.?

But the BCEAO holds Côte d’Ivoire’s foreign reserves, so Gbagbo’s ability to borrow and service debt will be hugely constrained. Certainly, paying soldiers will trump servicing foreign debt such as the Eurobond coupon.? Even if Camp Gbagbo’s talk of launching a new national currency is bluster, regional finance ministers worry about the threat to take Côte d’Ivoire – still the biggest economy in the region – out of the CFA zone.

AU begins new negotiations

A diplomatic offensive continues in the search for a resolution to the stalemate. At its meeting in Addis Ababa at the end of January, the African Union appointed the five heads of state from South Africa, Tanzania, Burkina Faso, Mauritania and Chad to a panel tasking with finding a resolution to the crisis.

The Economic Community of West African States (ECOWAS), the African Union and the UN have taken a strong stand, unambiguously telling Gbagbo to go. Unheeded, ECOWAS and the AU then threatened using “legitimate force” – a revolutionary proposition for usually cautious organisations. So far, their actions have not matched their bold declarations.?

Nigeria is not enthusiastic about intervention. It would have to pay for most of the operation and provide the logistics too. The country will hold its own elections in April. President Goodluck Jonathan is preoccupied at home with militias from the Niger Delta to the far north. Those realities might explain the mission of former president Olusegun Obasanjo to talk to Gbagbo in mid-January: few ex-leaders in the region are as blunt and forceful.?

Côte d’Ivoire’s neighbours watch on closely. Ghana’s President John Atta Mills has ruled out sending troops, saying the matter should be settled through negotiations. Other states are wobbling. An intervention against an incumbent president would set an uncomfortable precedent in a year when some 18 African countries are holding elections.?

Gbagbo’s camp says it is ready. One supporter showed Anansi a stash of arms in a darkened room, saying: “Eighty per cent of young Ivorians are unemployed. For us, a gun is a passport to making money.” Yet the truckloads of newly armed Gbagbo supporters patrolling Abidjan point to distrust: the cheerleaders cost money, and show a lack of confidence in the national army. “If you have to arm youths and recruit foreign mercenaries, you doubt either the capacity or loyalty of your own army of 18,000 men,” a general pointed out.?

ECOWAS could still revise its position if sanctions against Gbagbo start to work. Civil servants and then, more dangerously, the army and assorted mercenaries could be left without salaries. Gbagbo’s grip on the army relies on the generals, not the ranks, many of whom voted for Ouattara. As the pressure mounts, junior officers could cut a deal with Ouattara and mount a putsch.?

Those fighters from the northernForces Nouvelles that are blockaded in the Hôtel du Golf are motivated, but poorly equipped. If they made common cause with army soldiers, politics could quickly change.?

Ouattara’s foreign backers may also try to stoke divisions in the national army. Pro-Gbabgo journalists in Côte d’Ivoire and other Francophone states are already accusing France of plotting coups. Paris may calculate it has little to lose by fulfilling the prophecy.?

In ECOWAS, the priority is to maintain a common front. For now, an open split looks unlikely. “There are,” a regional envoy said discretely, “declarations as individuals, and there are declarations as states.” For West African leaders – half a dozen of whom face their own elections this year – the Abidjan stand-off is a high-stakes diplomatic battle.

When explaining why Côte d’Ivoire’s presidential elections were delayed for five years, a veteran Nigerian politican had told Anansi “it was very clear Laurent Gbagbo would not go to elections until he is absolutely sure he can win.” Doubtless, Ouattara’s declared victory by the Commission Electorale Indépendante shocked Gbagbo – but his refusal to stand aside in the face of regional and international pressure is absolutely in character.

A version of this article was published in the Anansi column in the February 2011 edition of The Africa Report.

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