Gbagbo`s funds cut as Ivorian standoff deepens

West African regional central bank cuts incumbent leader`s access to funds.

Abidjan: Incumbent Ivory Coast leader Laurent Gbagbo faces a cash crunch that could make it hard for him to continue paying the wages of soldiers who back him, after the West African regional central bank cut his access to funds.

The United Nations General Assembly, adding to international pressure on Gbagbo to concede defeat in a November 28 election, recognised challenger Alassane Ouattara as Ivory Coast`s legitimate president.

The standoff between the two men has caused the deaths of nearly 200 people and threatens to tip the country back into civil war.

Ministers from the Central Bank of the West African Economic and Monetary Union issued a declaration late on Thursday saying the bank would no longer recognise Gbagbo`s authority as president, and that access to funds would only be given to Ouattara`s "legitimate government”.

The move follows a World Bank decision on Wednesday to freeze some USD 800 million in committed financing, adding to expectations that Gbagbo may soon struggle to pay wages -- including to troops.

Military support for Gbagbo is seen as one of the main reasons he is able to defy calls to step down.

Gbagbo`s Finance Minister Desire Dalo did not comment when reached by telephone late on Thursday. A spokesman for Ouattara`s government said the decision by the central bank was "a very important move toward controlling the economic power”.

Ivory Coast`s USD 2.3 billion bond due 2032 fell nearly a point to a record low on Thursday as investors worried that the country would be unable to meet a USD 30 million bond payment on December 31.

Turmoil in the world`s top cocoa-producing country has also boosted cocoa prices to recent four-month highs, disrupting export registrations and raising the possibility that fighting could block transport and shipping.

Bureau Report