As Gbabgo seizes Central Bank assets in Ivory Coast, a look at the arcane institution(Read article summary)
West Africa's Central Bank – perhaps its most important institution – may also be its least transparent. But in the midst of Ivory Coast's conflict, a tradition of secrecy may be an early casualty.
When an infrastructure-strapped backwater such as, say, Guinea-Bissau looks to borrow the tens of billions of West Africa CFA francs it needs to tar rural roads and string power lines, its functionaries fly here, to La Banque Central des États de l’Afrique d’Ouest: the central bank for eight West African nations (Ivory Coast, Mali, Guinea-Bissau, Togo, Benin, Senegal, Burkina Faso, and Niger). It's where government debt is sold in the form of treasury bills to whatever arcane financiers harbor a niche interest in owning a chunk of Africa's debt.
Built in the shape of a Baobab tree at the end of the colonial era, the bank is as vital to its region as it is anachronistic – it has the feel of a secret society for African High Finance.
Three decades after the International Monetary Fund (IMF), NGOs, foreign leaders, and African reformists turned "transparency" into a generational rallying call, La Banque continues to define the lack thereof. The bank – a place as pre-Internet as Tutankhamun's tomb – communicates very little to the world outside its walls, and even less to callers who identify themselves as press. No reporter I know has ever been inside. I imagine it must be vacant, dim, and filled with terra-cotta soldiers.
"We've never really known the ins and outs of how the bank is governed," Eurasia Group Africa Analyst Anne Fruhauf said in a phone interview. "It's always been extremely nontransparent."
Battle over Ivory Coast's finances
But the ice facade around La Banque Central may have formed its first crack, last Saturday, when its boss, West Africa's Burkina Faso-based monetary union, forced the bank's Governor Philippe-Henri Dacoury-Tabley from office.
Mr. Dacoruy-Tabley's resignation came weeks after he balked at orders to stop his longtime colleague, Ivory Coast's renegade President Laurent Gbagbo, from accessing Ivory Coast's Central Bank account. Mr. Gbagbo, who is is now recognized worldwide as the clear loser of his country's Nov. 28 election, today responded to the news by surrounding the banks Abidjan branches with armored trucks and sending in soldier to loot the place.
If Dacoury-Tabley had followed the monetary union's orders, that would have happened on Dec. 23, when the Central Bank agreed to recognize Gbagbo's opponent as the sole head-of-state with access to the cocoa-producing country's bank accounts. At the time, the move was celebrated by the opposition as a fiscal checkmate move that would starve Gbagbo of funds to pay his soldiers. But between Christmas eve and last weekend, Gbagbo's government was able to wheelbarrow 157 billion West African CFA francs out of the bank, according to Economic Minister Toikeusse Mabri with the government of Ivory Coast's UN-recognized President-elect Alassane Outtara.
According to Mabri, Gbagbo's functionaries cashed themselves checks from the country's bank account; sold their own treasury bills in the midst of a near civil-war climate; sidestepped regulations; transferred Central Bank funds to commercial banks that recognize, or at least do business with Gbagbo.
And the world outside the Central Bank is still trying to comprehend how he managed it.
"We don't really know how this worked," Fruhauf said. "How does it usually work? How much money is held in Abidjan, and how much is held in Dakar? No one can really say."
Who needs bank statements?
On Jan. 17, Mabri himself flew to Dakar to ask for a "written report on all the withdrawals made since Dec. 23rd" – or, you know, a bank statement. The kind of thing your outlet mall-based bank mails you for free, even though you, respectfully, are not a leading African nation of 23 million people.
In an editorial in the Senegalese pro-government newspaper Le Soleil, Dacoury-Tabley said he tried to block Gbagbo from withdrawing money but eventually found it "utterly impossible."
"We cannot execute such decisions in a situation where those who have to carry them out are totally hostile," he said, criticizing Gbagbo loyalists within the bank.
In March, Ouattara – assuming he has control of his government – will appoint a new head to the Central Bank.
"Someone who will implement the decisions handed to him," was Mabri's only response to what Outtara's looking for in a governor.
But it's worth considering that Ouattara was once an Deputy Managing Director with the IMF – and that, in private, IMF officials have voiced as much frustration with the bank's 20th century outlook as anyone.
"They're stuck in the 1970s" is how one IMF delegate put it to me before the Ivory Coast election.
With soldiers plundering its Abidjan bureau, one wonders if they've been dislodged.