While I was living in the Central African Republic (CAR) in the late 1970s, a Lebanese friend of mine there named Abbas made a million dollars within a few years. His account of exactly how he did this provides a useful glimpse of the political economy of CAR during the reign of 'Emperor' Bokassa.
The main way in which Abbas made a quick fortune was to take advantage of the situation in Nigeria at that time. First, he took large sums of Central African Francs (CFA) to Nigeria and changed these on the black market for Nigerian nira. Since the Nigerian government insisted on keeping the official value of the nira at about four times its real market value at the time, Abbas obtained four times as much nira as he would have at a bank.
The Nigerian government was also using its enormous revenues from oil at the time to subsidize the cost of numerous consumer goods. Abbas purchased tons of these subsidized goods at their official nira rate, which means he got them for very low prices.
For example, he purchased 25-kilogram containers of sugar for the equivalent of $5 each. Thus, 6,000 of these containers cost him the equivalent of $30,000. He then rented three 40-ton trucks for $5,000 apiece to carry his load of 120 tons back to the CAR.
At the CAR border, Abbas was able to pay custom duties of 100% ($5,000) on only one-sixth of his cargo by giving three officials $500 apiece. He then sold his 6,000 containers of sugar for the equivalent of $30 apiece, for a total of $150,000. His overhead was thus $30,000 for the sugar, $15,000 for transport, $5,000 for taxes, $1,500 in bribes, and $500 for fuel. His profit was about $98,000 for a single trip such as this to Nigeria.
Members of the CAR's ruling elite, including Emperor Bokassa himself, began to take advantage of Abbas's expertise. Bokassa offered Abbas $180,000 to purchase 120 tons of rice needed to feed his army. Although Abbas feared that he might have a hard time getting paid, he naturally accepted the emperor's offer.
Abbas purchased 2,400 bags of rice in Nigeria for about $15 apiece, or for a total of $36,000. Since he was purchasing rice for Bokassa he did not have to pay custom duties at the border, so his overhead was $36,000 for the rice, $15,000 for transport, and $500 for fuel. His profit was about $128,000. Emperor Bokassa profited as well by paying less for the rice than the amount set aside for that purpose in his budget.
The prime minister's wife then asked Abbas to take her with him to Nigeria so that she could learn the ropes. He took her to Nigeria and explained how he did business, but instead of buying sugar or rice, she purchased tons of canned sardines. This proved to be a terrible mistake because it was very difficult to sell such a large number of this item in the CAR. The contents of most of these cans began to spoil in the warehouse and so she ended up having much of her precious cargo buried in a large pit in the ground.
Abbas was an experienced merchant and the minister's wife was not. When demand for a given item was relatively low in the CAR, Abbas knew it and acted accordingly. Each time he made a trip to Nigeria, for example, he purchased one Toyota landcruiser for the incredibly cheap price of $2,500. The subsidized cost of these Toyotas was $10,000, but after exchanging his CFA on the black market he purchased these Toyotas for one fourth that price.
He then drove his one Toyota truck back to the CAR and paid 100% duty on it (another $2,500) and then sold it for $12,500, for a profit of $7,500. It was easy for him to sell his Toyota for $12,500 because the local dealer in the CAR sold the same vehicles for about $17,500 at that time.
When Abbas explained how he did this to the prime minister's wife, she immediately decided to purchase a large number of these Toyotas in Nigeria as well. When she got them back to the CAR, though, she could only find a few people who were able to pay $12,000 for a vehicle, even if it was a great bargain. Most of these vehicles were thus eventually given away to clients of the prime minister, who had to cover his wife's losses.
Abbas also made money by purchasing goods for teachers from the Soviet Union who were living in the CAR at that time. These Russians were permitted to take a generous amount of duty-free luggage back to their motherland at the end of their contracts, so they gave Abbas a certain percentage of their salaries each month and he used this money to purchase underwear, jeans and other luxury items for the Russians each time he went to Nigeria.
The cost of doing business in the CAR was relatively cheap. Abbas paid the equivalent of $20 for a license to run a small store in a provincial capital and had to pay taxes of about $800 a year to the local mayor's office. He was often able to avoid paying such a large sum in taxes, however, by making payments to the mayor himself. He also gave generous sums to the provincial governor and to the head of the local gendarmes.
One provincial governor to whom he was making regular payments suddenly fell out of favor with Emperor Bokassa and was thrown into prison. The prisoner's wife found herself stranded in the provincial capital without any money and came to Abbas for help. Instead of cutting her off because her husband was temporarily out of favor, Abbas continued to support her until Bokassa was overthrown in 1979 and the ex-governor was released from prison. Soon after his release, he became the commissioner of police at the national airport. This made it much easier for Abbas to get money out of the CAR without any hassle. His investment paid off.
Abbas eventually managed to get all of his money out of the CAR. He married a Peace Corps volunteer and moved to the United States where he invested some of his money in a huge house and a big bar. The last time I saw him he was selling beer and chicken wings to a room full of happy customers.
Richard Bradshaw teaches history at Centre College in Kentucky. He lived and worked in the CAR for six years.
Date created: March 27, 1997 Last modified: March 27, 1997 Copyright © 1997, Rick Bradshaw Maintained by: Alan SaulCAR page