Switch to Desktop Site
 
 

How Ivory Coast's Gbabgo aims to solve his cash woes

Next Previous

Page 2 of 3

About these ads

Even the city's stock exchange, now shuttered, received a visit from the econ police.

"They asked us for cash, as if we keep sacks of money lying around in a stock exchange," a local trader told Time Magazine.

And that could just be the beginning. If it is, here's what could come next for a country that seems to be slipping toward a relapse to civil war.

1. Opening day at the Bank of Gbagbo

When Gbagbo's government nationalized the country's failing banks, his government proposed re-opening them as soon as last Monday.

"It remains to be seen whether this can be implemented in practical terms given that financial institutions are short of cash and will still be unable to perform basic inter-bank transactions," financial analyst Samir Gadio wrote in an e-mailed analysis.

After all, it's not like Ivory Coast's shuttered banks suffered bad leadership, spent too much money on bonuses or office rugs, or overexposed their shareholders to subprime housing loans. The banks lacked for money, not management.

2. Double-digit inflation while money disappears

"We also continue to think that inflation will soon be in double-digits," Mr. Gadio adds, offering a conundrum: Even as money becomes more cherished, it becomes more worthless.

That's partly because the country is running out of the things money buys even faster than it's running out of money.

Basic needs like cooking gas have become rarities in this country that has never knows the kind of week-long commodity shortages that routinely rock the West African neighborhood.

"Essential commodities," Eurasia Group's Africa analyst Anne Fruhauf says, "are fast becoming unaffordable."

Next Previous

Page:   1   |   2   |   3


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.

Share

Loading...