Gunfire Erupts at Army Camp in Ivorian Commercial Capital

(Bloomberg) -- Gunfire erupted at a key military camp in Ivory Coast’s commercial capital, Abidjan, and its second-biggest city of Bouake as a rebellion over unpaid bonuses entered a fourth day. The West African nation, which wants to issue a Eurobond next month, saw yields on its existing securities jump.

Several explosions and sporadic shooting rocked Bouake, a transit hub that links Ivory Coast to its landlocked northern neighbors, from about 2:00 a.m., resident Siriki Koné said by phone Monday. In Abidjan, gunfire began at about 5:40 a.m. near the military barracks in Akouedo, according to Joseph Kouadio, who lives in the area.

Gunfire Erupts at Army Camp in Ivorian Commercial Capital

A woman walks past Ivorian soldiers patrolling by Ivory Coast’s army headquarters in Abidjan on May 12


“We’re still hearing shooting,” Kouadio said by phone. “My son’s school just sent me an SMS to say: school is closed today because of the security situation.” While most banks in the city center remained closed, a port of Abidjan spokesman said that import and export operations carried on as usual.

The renewed unrest came a day after the army gave mutinous soldiers an ultimatum to end their revolt in Bouake, according to a person familiar with the matter who asked not to be identified because he’s not authorized to speak publicly. Special forces removed barricades blocking access to the city and were trying to quash the mutiny, the person said.

“A military operation is under way to restore order,” the office of Army Chief of Staff Sekou Toure said in an emailed statement on Sunday. It called on soldiers “to return to the barracks and lay down their arms.” State TV reported that one person was killed over the weekend, without giving further details.

Cocoa Producer

The unrest shows the enduring vulnerability of the world’s biggest cocoa producer since it emerged from a decade-long conflict that ended in 2011 when Alassane Ouattara, 75, came to power. His administration has restored calm, overseen an economy that’s expanded an average of 9 percent a year, and led his ruling coalition to an emphatic win in December’s parliamentary elections, taking 167 of the 255 seats.

Ouattara’s sway over the 40,000-member armed forces is more tenuous, with many soldiers who helped bring him to power now feeling the government has failed to deliver on its pledges to pay bonuses and improve their living conditions.

The government seems to be lacking a “clear vision” in its approach to the situation, according to Arthur Banga, a military historian at the Universite Felix Houphouet-Boigny in Abidjan. “The government should decide whether it wants to talk or stand firm. This time things can escalate. I don’t think the government has the financial means to respond to the mutineers’ demands.”

Cocoa prices rose 1.8 percent to $2,052 a ton as of 11:49 a.m. in Abidjan, the highest since April 7. The yield on Ivory Coast’s $750 million bond due July 2024 climbed 5 basis points to 5.87 percent, heading for its first rise in four days. The government plans to raise a $1.25 billion 15-year bond and another of 500 million euros ($547 million) with a six-year maturity next month, according to people familiar with the matter. JPMorgan Chase & Co., Standard Chartered Plc, BNP Paribas SA, Deutsche Bank AG and Natixis SA were picked to arrange the sale.

Government Compromise

The latest standoff was sparked by Ouattara’s announcement on Thursday that the government had reached a compromise with troops that organized a mutiny over unpaid bonuses in January.

The soldiers, most of them former rebels, were promised 12 million CFA francs ($19,875) in bonuses by the government for backing Ouattara after former President Laurent Gbagbo refused to accept an election defeat in 2010, but they have received less than half of the cash. Last month, the government revised its 2017 budget as it faces lower income from cocoa, its main export crop, limiting its ability to pay soldiers. The country also trimmed its growth forecast for this year to 8.5 percent from 8.9 percent previously.

Some people tried to organize protests on Sunday to show their unhappiness with the military unrest, which has become a common feature in the country since a 1999 coup. In Bouake, soldiers broke up a gathering of young people, injuring four, said Charles Gnaore, a lawmaker for the town from the ruling Rally of the Republicans party. Soldiers also used gunfire to disperse a protest in the northern town of Korhogo, according to resident Alphonse Toure.

“The soldiers are firing at the population,” Toure said by phone Sunday. “The population went out on the streets to say that we’re tired of soldiers.”