Military coups have become a regular occurrence in Africa for decades since the continent gained independence in the 1950’s. African tensions and military coups cause various impacts on the national economies of involved countries. In some cases, it may spill over into the wider region and the continent and even beyond to hit the global economy.

Recurrent Coups

Africa has more attempted coups than any other continent. Studies identified more than 200 attempted coups in Africa since the late 1950's. This year, Mali and Guinea were hit by military coups. In general, West and central African countries have the most military coups because of racial and ethnic rifts that provide a favorable environment, as well as the fragile security and political structure of involved states. However, despite the massive number of coups occurred, about half of the attempted coups failed.

Regional repercussions 

The negative consequences on economic development in Africa can be outlined as follows:

1-    More refugees and worsening living conditions:

Military coups and wars in Africa led to increasing numbers of refugees, and displaced people forced to move to more stable areas. Currently, Africa hosts one-third of the world's forcibly displaced population. This refugee crisis created huge economic burdens such as plummeting growth rate, soaring poverty rates, low median personal income, deteriorating infrastructure, family breakdown resulting from forced displacement and casualties, children kidnappings and recruitment in armed conflicts. Countries such as Sudan, Sierra Leon, Liberia, Rwanda and Mali were hit by military coups and civil wars that lasted for tens of years leaving more than 13 million people dead and rendering about 33 million others homeless.

2-    Economic sanctions and suspension of membership in regional organizations:

Such decisions are often made as a response to the exacerbating political and security situation in countries hit by military coups. The African Union and the continent’s other regional blocs often impose political sanctions on involved states. Following the May 2021 coup d’etat in Mali, The Economic Community of West African States (ECOWAS) suspended the country’s membership and imposed sanctions against the junta. Guinea’s membership in ECOWAS was also suspended in the wake of the September 2021 military coup. The moves, which have certainly raised concern and created uncertainty over the economic situation in the two countries, negatively impacting the goals and plans for completing regional economic integrations.

3-    Blocking economic development:

Africa is struggling to achieve the goals of sustainable development set in the African Union’s Agenda 2063, which aims to build a strong and globally integrated and influential economy. Additionally, Africa is keen on adopting peace and political stability as the backbone of these development aspirations through the Silencing the Guns. However, the political landscape across the continent is largely blocking efforts to carry out the development agenda.

Military coups create tensions and instability in involved countries, distract leaders and peoples alike from investing huge resources and encourage widespread financial corruption. In Nigeria for example, political tensions and coups over the past decades led the country’s natural resources, and oil in particular, to be plundered, pushing the country to the top of the list of the most corrupt African countries.

Moreover, political instability in Africa blocks economic development efforts. Some 15 out of 20 African countries ranked as the most fragile on the Fragile States Index 2021. These include the Central African Republic, Somalia, Sudan, the Democratic Republic of the Congo, Chad, Guinea and others, all of which are suffering from instability.

Sudan, under former President Omar al-Bashir (1989-2019), witnessed severe political and security instability including strained relations with the international community. As a result, the country sustained huge economic losses that were further exacerbated when South Sudan broke away from Sudan in 2011, and Sudan was designated as a state sponsor of terrorism. Since 2019, Sudan has been going through political transition marred by internal tensions that are likely to worsen because of the current development, especially after Lieutenant-General Abdel Fattah al-Burhan, former Chairman of the Transitional Military Council, on October 25, dissolved the Sovereignty Council and the cabinet and declared a state of emergency across the country. As a result, instability is likely to pose threats to the country’s economy, disrupt economic reform plans and lead to a return of international pressures and sanctions. On the same day, the US Department of State suspended aid to Sudan.

Global repercussions

As said earlier, the economic implications of military coups in African go beyond the internal and regional levels into the global arena. Following is an explanation:

1-    Rise in global prices of strategic commodities:

Political unrest caused by military coups in Africa slowed down main economic activities such as agriculture, the oil industry and mining across the continent. Political or military parties fight for the control of these resources or disrupt supplies in order to place pressure on their opponents. The disruption impacts production of strategic commodities causing domestic economic issues, pushing up global prices and raising fears of further disruptions of supplies, especially when involved states produce a considerable share of the global supplies of these commodities. The following are examples of such situations.

A- Posing threats to global demand on oil: From September 19, 2021, Sudan has been hit by popular protests in the east blockaded Por Sudan, briefly disrupting the transportation of oil supplies from South Sudan to global markets. Later the Sudanese authorities reached an agreement with the protestors to allow the resumption of oil exports from the Bashayer-1 and Bashayer-2 ports on the Red Sea.

The tensions led to a rise in fuel prices in Sudan and neighboring countries. The impact of the disruption on global markers was limited because Sudan and South Sudan are not major oil producers. But the global oil market would be further affected if Nigeria, for example, which produces more than 1.7 million barrels a day, would be hit by political or security turmoil.

B- Rising prices and profit margins of crops: Cocoa prices, for example, would significantly increase whenever African producer countries are hit by political instability or military coups. Africa is the largest producer of cocoa with a share of two thirds of the global supplies.

Ivory Coast alone produces 50 percent of the continent’s cocoa supplies. The Ivorian government and rebels used large revenues cocoa exports to fund their military operations, thus prolonging political tensions, civil wars and coups which hit the countries over the years. The impact was a reduction in the production of this commodity, further exacerbated by destruction of farms and shortage of machinery. But as part of the most serious consequences of political stability in Ivory Coast, farmers were forced in recent years to insist on higher profit margins from cocoa crops as a precaution against sudden security and political volatility and shifts. A concurrent huge increase in demand on cocoa from China, India and Europe helped push up the prices of the crop on global markers.

C- Increasing prices of industrial metals: The mining and quarry industry account for 20 percent of Africa’s gross domestic product, and represents a major source of revenue for many African countries. African countries produce a significant share of diamond, gold, bauxite and others. Guinea for example, is a major producer of bauxite, used globally in producing aluminum, holding 26.4 per cent of the world’s reserves and accounting for 22 percent of global production.

The military coup of September 2021 in Guinea caused the prices of bauxite to soar 40 percent, the highest increase since May 2011. The development came amid an ongoing global economic recovery from the Covid-19 pandemic, and an increasing demand from the construction and automotive industry. Overall, these circumstances are likely to erode the world’s bauxite stockpile when the supplies cannot match demand, crippling the global markets for some time.

2-    Booming illegal trade of precious metals:

Global diamond prices were affected by persistent conflicts and military coups in African producing countries such as the Central African Republic and Sierra Leon. Armed groups operating in these countries are seeking to seize control of the production and trade of diamond through intermediaries and illegal channels to fund their military activities, in violation of international bans, to sell the precious commodity at prices unusually lower than the reference price set by the governments.

Similarly, gold is being illegally mined and traded through increasing unauthorized operations carried out by militant groups, which become more active during political unrest. These practices cause huge losses to the involved African countries.

In West Africa, Ghana, Burkina Faso and Niger in particular lose revenue from a trade of 30 tons of gold that are illegally mined, while central and east African countries lose some USD 4 billions a year because of illegal smuggling. Therefore, the biggest losers are apparently African economies and not the major gold merchants or companies which buy precious metals at prices much lower than reference prices set by the governments and competent authorities.

3-    Escalating conflict between world powers scrambling for economic influence in Africa:

There is literature accusing major international powers such as France and the United States of backing military coups in some African countries over the past years. Their aim is to undermine the growing interests of other international powers, and Russia and China in particular.

For example, in Guinea, China has strong influence through 14 private and state-owned companies involved in bauxite mining and processing. Furthermore, Guinea is home to the Simandou mine, the world's largest known iron ore deposit of its kind. Two Chinese companies, Rio Tinto and Hongqiao, are operating in the giant mine. China, which is the world’s largest producer and consumer of aluminum, controls 50 per cent of Guinea’s bauxite exports, estimated at 52.5 million tons in 2020.

It is believed that the leader of the recent coup in Guinea maintains strong ties with both the United States and France. The two western countries are likely to use these ties, with help from the new political forces in Guinea, to reduce China’s presence. However, it should be noted that several African countries consider China as an ideal strong partner in the process of development, thanks to the development efforts it leads through the Belt and Road Initiative as well as aid and loans, unlike western powers accused by some of being the hidden hand involved in stirring up civil wars that hit several African countries.

The conclusion is that military coups in Africa have a negative impact not only on the involved countries, but also on the whole continent. The impact spreads beyond the continent to also hit the global economy and markets by significant rises in the prices of oil, minerals and agricultural crops. This eventually causes waves of global inflation. Therefore, political and security stability in Africa continues to be the only way for establishing strong and promising economies that take serious steps towards development using real popular participation.