EU and France to inject $840 million to jumpstart Ivory Coast economy(Read article summary)
Most of the aid – $540 million – will come from France, the former colonial power in Ivory Coast, 'to finance emergency spending on the population.'
Freetown, Sierra Leone
Prospects for Ivory Coast’s recovery got a huge boost this afternoon, when France and the European Union announced a joint plan to inject $840 million into the Ivorian economy to help the conflict-torn country get back on its feet.
The bulk of that donation – $540 million – will come from France, the former colonial power in Ivory Coast.
The French aid is meant “to finance emergency spending on the population, the city of Abidjan, and restarting essential public services,” according to a statement from Paris. “It is also to help restart the economy and to allow Ivory Coast to make its overdue payments to international institutions.”
The Ivorian economy – the second-largest in West Africa – has ground to a halt over the past few months, as the EU, the United States, the United Nations, and West Africa’s central bank slapped sanctions on the country and some of its elite.
The trade bans were largely successful in limiting Mr. Gbagbo’s access to cash. And on Monday, Gbagbo was finally captured in a presidential bunker. But the Ivorian economy has also felt the effects of the sanctions.
More than 400,000 tons of cocoa beans are now sitting in warehouses in Ivory Coast’s two major ports, and even more is waiting to be transported from inland rural areas. In Abidjan, the commercial capital, ATMs have run out of cash, cooking gas is in short supply, and hospitals are low on medicine. Many government salaries haven’t been paid in weeks.
“Every morning, people have to take jerrycans to walk around the neighborhood and search for water,” an Abidjan resident told The Guardian. “As for food, there is nothing left. People have to queue up in long lines to buy even a single baguette.”
The EU announced on Friday that it would lift its sanctions, allowing the ports in both Abidjan and the city of San Pedro to reopen, as well as the state agencies that manage refining and coffee and cocoa exports.
"Things seem to be moving fast,” a senior bank analyst told Reuters. “The EU is moving on the sanctions front and there are reports that shipments are to move soon.”
But obstacles remain. A big one will be getting the banking system up and running again, analysts say. Without financing, exports won’t ship.
Ivory Coast is the world’s biggest cocoa producer, exporting more than a third of global supply.
The price of cocoa has jumped frequently since the trouble started in Ivory Coast late last year. It spiked again on Monday, hitting a one-week high, after news broke of Gbagbo’s capture. Traders, it seems, are betting that violence will continue to disrupt the flow of cocoa from the country’s ports.
“People want clarity on how and when exports will begin,” a senior trading adviser in Chicago told Bloomberg yesterday. “People want to be sure that there will be no more disruptions.”
Once the conflict dies down, the country should have an able financial leader in Mr. Ouattara, who worked for several years at the International Monetary Fund and is the former head of West Africa’s central bank.
The new president addressed his citizens on state television last night.
“After more than four months of post-electoral crisis, marked by so many human lives lost, we are finally at the dawn of a new era of hope,” he said.