Ivory Coast Faces Higher Prices, Shortages Amid Election Crisis

Since Ivory Coast’s disputed presidential election on Nov. 28, prices have soared at Abidjan’s Treichville market, fuel has been in short supply and an evening curfew has damped business at clubs and restaurants.

“Everything has become more expensive,” said Mariam Kone, a food seller at Treichville.

The economic cost of the crisis is mounting, with no end in sight to the political deadlock that has seen two rival candidates sworn in as president. Cocoa farmers have slowed delivery to processing plants because of safety fears, while Newcrest Mining Ltd., Australia’s largest gold mining company, said on Dec. 6 that it had suspended operations at its Bonikro mine.

Opposition candidate Alassane Ouattara was named winner of the vote with 54.1 percent by the country’s electoral commission on Dec. 2. A day later, the Constitutional Council annulled the win by canceling votes in some northern regions over allegations of irregularities, and named incumbent President Laurent Gbagbo the victor.

“We need to know who our new president is so prices can go down again,” Kone said.

The United Nations, the European Union, the U.S. and the African Union have all called on Gbagbo to cede power to Ouattara. The Economic Community of West African States and the African Union suspended Ivory Coast from their regional blocs this week.

Growing Discontent

“The medium-term risk for Gbagbo is growing socio-economic discontent if shortages become protracted, inflation accelerates and economic stagnation returns,” said Rolake Akinola, principal consultant for sub-Saharan Africa with VoxFrontier Consulting, based in London.

Companies have closed their doors or reduced their hours because of a nighttime curfew, according to a statement from the Confederation Generale des Entreprises de Cote d’Ivoire, an Abidjan-based business association.

“I haven’t increased my own prices, because otherwise I won’t have any more customers,” said Kouraogo Savane, a cafe owner in Abidjan. If the crisis continues, “I won’t have any other option.”

Transporting food to markets has been hindered by concerns over security on the roads of the West African nation, a fear that is also keeping cocoa from leaving the farms of the world’s top producer.

“Truck owners are refusing to rent their trucks,” said Blanchard Allo, an accountant at a farmers’ cooperative in the central town of Gagnoa, the hometown of Gbagbo, who has ruled the country for a decade. “There is a lot of cocoa right now, but we can’t move it to Abidjan,” he said by phone yesterday.

First Shipments

Another cooperative in the coastal town of Grand-Lahou made its first cocoa shipment since the election on Dec. 7 -- some 20 metric tons of beans -- Theodore Konan, the head of the group, said by phone on Dec. 8.

“Now everybody is working again, but not at full speed,” he said. “The country is in bad shape.”

Concern over supply shortages, which have pushed cocoa for March delivery up 7 percent since the election, have abated with prices of the beans falling 55 pounds, or 2.8 percent, to 1,937 pounds per ton by 10:49 a.m. on the NYSE Liffe in London, the fourth consecutive decline.

Economic growth in cocoa-dependent Ivory Coast has averaged 1.1 percent in the eight years since a military uprising in 2002 left the country divided between a rebel-held north and government-controlled south. During this time, the country missed out on the wave of foreign investment in Africa from such nations as China.

The current crisis has put a $3 billion debt cancellation plan “under threat,” said Akinola. Ivory Coast was due to complete the International Monetary Fund and World Bank Heavily Indebted Poor Countries’ debt-relief program next year, she said.