Political Economy Analysis: Economic Costs of Terrorism in Sub-Saharan Africa

Introduction

Background

Terrorism poses significant challenges to economic development in sub-Saharan Africa. The region has experienced various forms of terrorism, from insurgent groups like Boko Haram in Nigeria to Al-Shabaab in Somalia. These activities have profound economic impacts, influencing everything from GDP growth to foreign investment. This analysis will explore these economic costs through a political economy lens, focusing on direct and indirect costs, sectoral impacts, and policy responses. Global Terrorism Index (GTI) has declared some countries as the most terrorized. Countries. Sub-Saharan African are among the worst-hit according to the (Global Terrorism Index, 2014) [1-6]. The region is the most vulnerable, with the highest number of deaths from terrorist attacks [7]. The growing trend is alarming and requires a strenuous counter- terrorism effort from the countries involved. This has eventually triggered a war against terrorism. Among the Sub-Saharan countries, Angola, Burkina Faso, Burundi, Cameroon, Central Africa Republic, Chad, Cote D’ivoire, Democratic Republic of Congo, Ethiopia, Kenya, Mali, Madagascar, Mozambique, Niger, Nigeria, Somalia, South Africa, South Sudan, Sudan, and Uganda are documented amongst the terrorized countries.

                                    Table 1: Very High, High, and Medium Impact of Terrorism in SSA Countries

                                                 Table 2: Low, Very Low, and No Impact of Terrorism in SSA Countries

After the widely publicized September 11 attack, there were four distinct phases in global terrorism. From 2002 to 2007, the number of terrorist attacks rose steadily, associated with the increased unrest in Iraq. This pattern was at its highest in 2007, after the U.S. military surge, the terrorist activities dropped, with the number of deaths falling by 35% between 2007- 2011. The third phase was from 2011 to 2014, where the worldwide rate of terrorism spikes, with many more deaths from terrorism. There was more than a 350% increase in deaths at that time frame, according [6].

The rise is associated with ISIS, the Syrian civil war, and Boko Haram's re-emergence in Nigeria. From 2014, the 4th and the current trend of the world terrorist activities have seen a decline in terrorism fatalities as of 2019. Figure 1 reveals that the danger of terrorist activities is higher in the Sub-Saharan African soil with an average of 4 death per attack compared to 2.6 in the Middle East North Africa (MENA) region, even though the highest number of fatalities was documented in the MENA region (with 96,360 deaths since 2002) [7].

Figure 1: Regional Trend of Death Per Attack from 2002-2019

[Source: Authors computation from the Global Terrorism Index (2019) [6].]

Similarly, Figure 2 shows the pattern of terrorist activity (the number of terrorist attacks) in sub-Saharan Africa from 1999 to 2019. The number of attacks is low between 1999-2003, with the highest number of incidences in Uganda with 117 attacks and no attacks in Burkina Faso. Between 2004 and 2008, terrorist activities remained below 50 in all countries, except for Nigeria and Sudan. The years 2009-2013 show a severe increase in terrorist activities, as Nigeria suffered 1,243 attacks over the period. Kenya followed with 215 attacks; Ethiopia, Mali, South Africa, and the Central African Republic have a reasonable number of attacks. The year between 2014-2019 were the worst with Nigeria witnessing a sharp increase in terrorism, to the tune of 3017 attacks. Sudan followed with 636 attacks, while Ethiopia and Uganda suffered the lowest, 59 attacks between 2014-2019.

Figure 2: Number of Reported Terrorist Attacks in the selected Sub-Saharan Africa from 1999-2019.

[Source: Authors compilation from the Global Terrorism Database (2019) [6].]

Aims and Objectives

The aim of this study is to highlight the level of terrorist activities and its economic costs in Sub-Saharan Africa. It does so by analyzing the political economy of the terrorism and its economic costs at SSA sub region. The analysis helps to understand level of terrorist activities in the region and how much it cost regional economy. The study is expected to identify the role of international organizations, government, and community in providing solutions to the menace of terrorism in SSA.

Approach and Methods

This study employed a political economy approach. Data were obtained from data banks of world economic indicators, Global Terrorism Database, Global Terrorism Index and SIPRI. Political economy approach is often employed in diagnosing trend of terrorism and its economic impact, identifying solutions to them or developing strategies to address the challenges.

Economic Costs of Terrorism in Sub-Saharan Africa

Destruction of Infrastructure Physical Damage:

Terrorist attacks often result in the destruction of critical infrastructure such as roads, bridges, and schools. For example, Boko Haram’s attacks have led to significant destruction in north-eastern Nigeria, hampering transportation and commerce. Governments must allocate substantial funds to rebuild destroyed infrastructure, diverting resources from other developmental projects to reconstruction.

Human Life Losses Displacement of the Populace

Loss of life, causalities and the displacement of populations reduce the workforce and disrupt local economies. Displaced persons often lose access to employment, education, and healthcare. causalities increased healthcare costs arise from treating victims of terrorism and addressing the long-term psychological impact on populations.

Reduced Foreign Direct Investment (FDI) and Trade Disruptions

Terrorism creates a perception of instability, deterring foreign investors’confidence in return to investment. The SSA countries have experienced have seen declines in foreign investment inflow and high capital Flight. Domestic investors may also transfer their assets abroad to safer environments, leading to capital flight. The resources allocated to military also crowd out investment. Because, public resource meant for provision of infrastructure for meaningful development are diverted to defence sector. Terrorist activities disrupt supply chains, affecting trade. For instance, attacks in the Sahel region have disrupted trade routes, impacting regional commerce. Heightened security measures increase the cost of trade, as businesses invest in additional security for transportation and logistics.

Military Spending and Crowds-Out Effect

Despite huge infrastructural deficit in the sub-Saharan African countries, huge amount resources were expended on military services from public accountants of SSA countries. Figure 3 shows the trend of military spending in the selected sub-Saharan African countries between 1999 and 2019. The countries are selected based on the ranking global terrorism index ranking (as the countries with highest and lowest terrorism incidence in the SSA region) and availability of data. In 1999, Angola, Sudan, South Africa and Nigeria were the biggest spenders, investing 4520, 2308, 2044 and 1141 million dollars respectively in 1999. Burkina Faso, Burundi Chad, Central African Republic, Mali, Mozambique, Madagascar, and Niger spends less than $100 million each in 1999. In 2008, Sudan led the spending with US$ 6974, followed by South African’s US$ 3317, then Angola’s US$ 3212 and Nigeria’s US$ 1705. Additionally, Kenya and Chad spend $760 and $661 respectively, while other countries devote less than $500 million. In 2014, Angola, Sudan, South Africa and Nigeria maintain the lead in this order. The military expenditures of almost all the countries declined in 2019.

Figure 3: Military Expenditure of the Selected Sub-Saharan African Countries

[Source: Authors compilation from SIPRI Military Expenditure Database.]

Precisely, Figure 4 displays the military spending (% of GDP) of Sub-Saharan Africa1 (SSA) from 1999 to 2019. The picture shows that the highest military burden was in 1999, which account for 1.93 per cent of the sub-region’s GDP. The lowest allocation was represented by 1.01 per cent of 2019. [8].

Figure 4: Military Expenditure (% GDP) of SSA from 1999-2019

[Source: Authors compilation from [9,10].]

Decline in Tourist Arrivals is another significant effect of terrorism in SSA. Countries like Kenya and Tanzania have seen declines in tourism revenues following terrorist attacks. Tourism is a major source of income and employment in many sub-Saharan African countries. Revenue Losses reduced tourist arrivals lead to significant revenue losses in the hospitality and service sectors.

Agriculture

Disruption of Farming Activities is another point where terrorists' activities negate economies in the SSA. Terrorist often forces farmers to abandon their land, leading to reduced agricultural output. In regions like the Lake Chad Basin, Sokoto Rima Basin etc. agricultural activities have been severely disrupted and declined. This Reduced agricultural production exacerbates food insecurity, increasing dependency on food imports and aid. The revenue inflow from agricultural sector has drastically declined.

Policy Responses and Recommendations

Strengthening Security Measures

Enhanced Counterterrorism Efforts: Governments need to invest wisely in effective counterterrorism strategies, including military and intelligence capabilities. Evidence from existing empirical investigation reveals that military expenditure in the midst of terrorism affects economic growth and foreign direct investment favourably. Therefore, SSA countries with high level of terrorism can invest in defence in order to arouse investors’ confidence and enhance economic growth.

Regional Cooperation

Enhancing cooperation among sub-Saharan African countries is crucial to combating transnational terrorist threats. This could be achieved through African Union, United nations and other international bodies.

Reducing Dependency on Vulnerable Sectors

Diversifying economies can lessen the impact of terrorism on specific sectors like tourism and agriculture. Diversification of productive sector will enhance economic growth in the region, increase the level of employment and reduce the level of poverty in the terrorised SSA countries. Investing in sectors less susceptible to terrorist attacks, such as technology and renewable energy, can provide more stable economic growth.

Community Engagement and Capacity Building

Engaging local communities in development projects can reduce the appeal of extremist groups. Similarly, the use of populace in the community policing can reduce the menace of terrorism in the affected SSA countries. Programs aimed at building local capacities for governance, security, and economic management are essential

Social and Economic Development and International Support

Addressing root causes is another long-term solution to terrorism. This requires addressing underlying issues such as poverty, unemployment, and social inequality. Achieving this long- term solution is possible if issues that are associated social and economic development in SSA countries are solved efficiently. These issues can best be solved with the help of international support and engagements.

Conclusion

The economic costs of terrorism in sub-Saharan Africa are substantial and multifaceted. Addressing these challenges requires a comprehensive approach that includes strengthening security, promoting economic diversification, and addressing the socio- economic roots of terrorism. By adopting a holistic strategy, sub- Saharan African countries can mitigate the economic impacts of terrorism and foster sustainable development.

References