The global economic recession has hit many African countries hard. A new report says some of the continent’s fragile states are especially vulnerable to the shocks of the global financial crisis and says there may be a link between economic downturns and conflict. The authors call for targeted donor support to prevent a humanitarian crisis.
Much of Africa is on the outskirts of world trade. So, it’s not surprising that last year, many economists thought the continent would not be affected much by the global financial crisis.
Their views have changed.
Over the past year-and-a-half, much of Africa has been suffering from the rising cost of imported food and fuel. Following these shocks was the near collapse of the international trading system.
African countries dependent on exports have seen prices drop or fluctuate for their primary commodities, like oil, copper, diamonds, gold or tobacco. It has been much the same for those that had begun exporting high-earning, specialized crops, like flowers or vegetables to Europe.
Also hit have been countries that have few trade ties to the world but that are still dependent on now-declining remittances from citizens living abroad. Others depend on declining levels of overseas development aid.
A summary of the effects of the global crisis on Africa is included in a recent report by the Governance and Social Development Resource Centre, a part of the International Development Department of the University of Birmingham in Britain. Shiv Bakrania is the lead author of the report which also discusses sub-Saharan African countries thought to be most vulnerable to the effects of the financial crisis and at risk of further instability and conflict.
The assessment uses the Brookings Institution Index of Weak States and an analysis of vulnerable countries by the International Monetary Fund to identify the likely flashpoints most in need of humanitarian and longer-term development assistance.
"The two hot spots," says Bakrania, "are the Horn of Africa and Central Africa.The Horn was already suffering from a food and fuel crisis and drought….Some problems could spill into relatively stable states like Kenya, which is dealing with its own food emergency. Decreasing income streams could even move some previously stable countries towards fragility."
The study says countries defined as high risk often have weak governments and are vulnerable to the shocks of the economic crisis. Some are recovering from civil war. Among them are Somalia, the Democratic Republic of the Congo, Sudan, Central African Republic, Liberia, Ivory Coast, and two states that depend on oil as their main export, Angola and Nigeria.
The DRC could become a center of further instability in the Central African region. The global financial crisis has affected its important drivers of growth, mining and infrastructure projects. The World Bank predicts that lower commodity prices will lead to reduced export revenues and the end of the country’s current surplus.
Burundi, recovering from years of conflict, is faced with a drop in the price of its main source of foreign exchange, coffee. The report notes that elections are due next year, though not all of the agreements between the warring parties have been implemented, amid growing political tension.
A withdrawal of international support could also affect neighboring countries Liberia and Sierra Leone, which are recovering from the lingering effects of civil war. Those two countries, along with Guinea, make up an area of potential conflict. Scholars also note a link between reduced economic activity and violence, especially when large numbers of young men are unemployed. Unrest can also ensue as ethnic and religious groups vie for limited resources.
"The impacts of the financial crisis," he says, "could lead to more crime and criminality because those issues do not respect borders and we could see them spread to neighboring countries."
The report offers a number of suggestions, including stepped up aid commitments, greater coordination between donors and national governments,and social budgeting that targets the poorest.
Bakrania calls for improved data collection and monitoring.
"We found that, for the Horn of Africa and Central Africa regions, there is a real paucity of information on the impact of the financial crisis on fragility and poverty," he says.
"So one suggestion is that donors need to support further research and monitoring in those regions, especially at a local level and using local expertise where possible, so we can keep a close eye on trends and better forecast where humanitarian aid and development assistance will be needed."
Bakrania also says donors must design policies that emphasize support for women and children in particular.
It’s best, he says, for donors to take a regional approach where possible and work with inter-governmental institutions such as the East African Community and the Economic Community of West African States. He says regional interventions would have a wider effect across national boundaries.
Bakrania urges the G20 countries to honor or even increase their past commitments of aid to Africa rather than bend to domestic pressures to curb overseas development assistance. He welcomed the policies of some countries, like Great Britain, which has committed at least half of all new bilateral country funding to fragile countries.
Shiv Bakrania is the Manager of the Global Facilitation Network for Security Sector Reform (GFN-SSR) and the report which this article refers to was commissioned through the Governance and Social Development Resource Centre (GSDRC).
The report, The Impact of the Financial Crisis on Conflict and State Fragility in Sub-Saharan Africa, is available as a free download from the GSDRC website http://www.gsdrc.org/docs/open/EIRS6.pdf