IMF Says Ivory Coast Crisis Could Hurt West African Economic Union

The International Monetary Fund warned that the political crisis in Ivory Coast could have “severe” spillover effects on the economy of West Africa.
The Washington-based IMF said there are “considerable risks” to the recovery of the West African Economic and Monetary Union. Rising oil and food prices will fan inflation and a projected expansion of about 4.3 percent in the eight- country region requires a “rapid and peaceful solution” to the Ivory Coast standoff, the IMF said.
“If not resolved soon,” the turmoil could “have severe human and financial cost for neighboring countries” in the monetary union and in the region, “including though trade, migration, and financial sector channels,” the IMF said in an e-mailed statement today following a March 14 board meeting about the common policies of the union.
Ivory Coast, the world’s top cocoa producer, is on the brink of civil war, with more than 400 people killed since a disputed Nov. 28 election, according to the United Nations. While Alassane Ouattara is the internationally recognized winner, incumbent President Laurent Gbagbo, who retains the loyalty of the armed forces, refuses to cede power.
The IMF also urged member countries to restore the functioning of the union’s banking commission, saying it is “critical to ensure effective supervision and minimize the spillover risk” from Ivory Coast.
To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net