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Same-Day Analysis

Ivorian government's capitulation to soldiers' pay demands raises risks of further mutinies and prolonged public-sector strikes

Published: 17 May 2017

Côte d'Ivoire's government has been forced into a U-turn over plans to block a second tranche of soldiers' bonuses, following four days of nationwide disruption.



IHS Markit perspective

Outlook and implications

• The power of former rebels loosely integrated into the national army to gain their demands has been reiterated by the Ivorian government's swift concession over bonuses.

• Misreading and mismanagement of the situation by President Ouattara's government is likely to be highly damaging for the country's reputation as a rapidly expanding investment destination.

• Largesse granted to soldiers is likely to drive lengthy disruptive strikes in the civil service and cocoa sectors when the government is even less able to meet demands.

Risks

Government instability; Protests and riots; Labour strikes

Sectors or assets

Cocoa; Cargo

Mutinying soldiers stand guard at an entrance to a checkpoint in Bouaké, Côte d'Ivoire, on 15 May.

PA 31330851

Soldiers who had mutinied for the second time this year headed back to barracks yesterday (16 May) after accepting a bonus deal conceded by the Ivorian government. Defence Minister Alain-Richard Donwahi had made a brief televised announcement the night before that a deal had been concluded, which effectively gives mutineers the remaining XOF7 million (USD12,660) they had been demanding. It will be split into two payments, with XOF5 million being disbursed in the next few days and the remainder being paid sometime in June. It was only evident around lunchtime yesterday that the settlement was going to be accepted by the estimated 8,500 soldiers it concerned, as no clear leadership had emerged in most barracks since mutinies broke out on 12 May.

Scattered gunfire had been reported overnight in commercial capital Abidjan, as well as the port city of San Pedro and the second city of Bouaké, epicentre once again of a mutiny by soldiers. The port of Abidjan reopened yesterday, having been closed on Monday, but San Pedro remained closed, delaying exports of the country's main revenue earner, cocoa. Schools in Abidjan were also closed for a second consecutive day, and the African Development Bank told its several thousand employees based in the commercial capital to stay at home. Troops in Bouaké handed back control of the city entrances to police and gendarmes, allowing gradual dispersal of more than 200 commercial vehicles which had built up on the main north-south route between Abidjan and Burkina Faso.

The same group of 8,500 soldiers had triggered a series of mutinies in January, which prompted copycat incidents among police, gendarmes, prison officers, and Special Forces (see Côte d'Ivoire: 19 January 2017: Ivorian mutiny's triggering of further payment demands increases risk of persistent military protests and transport disruption). The mutineers were former Forces Nouvelles (New Forces) fighters who had helped bring President Alassane Ouattara to power in April 2011 following a disputed election, and were claiming what was effectively back pay for the time between Ouattara's accession and the 2007 Ouagadougou Accords, which were meant to pave the way for a much earlier return to democratic elections. They were paid an initial XOF5 million in January, and were expecting the rest this month before a surprise televised meeting on 11 May at which a supposed spokesperson for the group not only renounced further financial demands in front of President Ouattara, but apologised for their previous actions.

Outlook and implications

The latest round of mutinies has ended up being a huge embarrassment for the government, which has merely reiterated the power of a poorly integrated army to hold the country to ransom and has ended up paying all the soldiers were owed, only with the minor face-saving concession of paying a second tranche in June. Perhaps most damaging is the complete mishandling of the situation at a time when Ouattara's government is battling to preserve its standing as the favoured destination for West African investment in the face of falling revenues caused by plummeting prices for major export cocoa. Ouattara had been forced to announce a XOF54 billion (USD91 million) cut in the 2017 budget in late April, noting that state revenue income from cocoa had already dropped USD250 million from expected levels. He was facing having to pay out this month the remaining USD100 million of the USD170 million promised to soldiers and IHS Markit sources indicate he allowed himself to be persuaded by a senior adviser or minister that a deal had been agreed in consultation with mutineers who accepted the pleading of poverty.

That this was clearly not the case was evident in the furious reaction of soldiers in barracks across the country, with troops coming on to the streets firing in the air and setting up barricades. Many pointed out that they had made financial commitments in the expectation of a second bonus tranche, had no idea who the spokesperson in the televised meeting with Ouattara was, and were further infuriated by his apology. Defence Minister Donwahi initially indicated there would be no compromise, while new army chief of staff General Sekou Touré insisted on 14 May that mutinous troops would be disarmed by force if necessary. A column of loyalist troops was seen setting off for Bouaké from administrative capital Yamoussoukro, but when mutineers there proclaimed they had no intention of backing down, it was clear there was no appetite for armed confrontation and the units turned round.

Apart from reiterating to soldiers the power they have to enforce demands over salaries and working conditions, the deal is likely to give impetus to ongoing strikes in the civil service and cocoa sectors. Teachers and health service workers, in particular, have been staging regular strikes since 2015 to demand unpaid salaries and bonuses, including a three-week strike throughout the civil service in January as the initial mutinies unfolded. Further evidence of the uneven rewards granted to soldiers because of their disruptive capabilities is likely to drive prolonged strikes with salary demands the government is struggling to meet. The fall in cocoa prices has focused attention on mismanagement in the industry regulator, Le Conseil du Café-Cacao (Coffee and Cocoa Council: CCC), with growers now facing a big cut in the farmgate price of XOF1,100 per kilogram to around XOF800 for the May to August mid-crop harvest. Protests and strikes are likely to become more violent in an attempt to force concessions out of the government, and are more likely to focus on disruptive aims such as blocking exports, particularly of cocoa, at the vulnerable access points to the main ports of Abidjan and San Pedro.

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