Ivory Coast's biggest bank, a unit of Societe Generale, suspended operations on Thursday, the latest in an exodus of foreign banks that is turning a political crisis into financial meltdown. Shutters were down on branches across Abidjan, the main city, while agencies still open were swamped with customers trying to withdraw cash.
Societe Generale latest bank to close Separately, cocoa farmers marched on the Ivorian offices of the European Union, whose sanctions on regulators and ports have contributed to the shutdown. The financial system in the world's top cocoa grower is on the brink of collapse as a result of a post-election power struggle between incumbent Laurent Gbagbo and rival Alassane Ouattara that is entering its third month.
Gbagbo has defied international pressure to step down after UN-certified results showed Ouattara won a November 28 poll. But he has been cut off from the West African central bank and sanctions aimed at squeezing his finances are kicking in.
The election was meant to reunite a country that has been divided since a 2002-3 civil war and to spur investment. But the violent stand-off, which has killed some 300 people according to the United Nations, has merely deepened divisions.
Societe Generale became the fifth bank to close after fellow French bank BNP Paribas's Ivorian unit, Citibank, Nigeria's Access Bank and Standard Chartered all suspended operations this week.
Societe Generale and BNP Paribas between them ran more than two thirds of the banking system. Banks cited security concerns and problems with liquidity and clearing cheques. "We faced, on the one hand, the impossibility of making clearing exchanges function normally; on the other, the impossibility of provisioning our tills in the short term," the Societe Generale statement said.
Comments
Comments are closed for this article.