Kojo Quartey: Economic impact of coups
I have been reading with interest about the coup in Niger (pronounced knee-jeer – close enough) in The Monroe News (Associated Press), which has had excellent coverage of this occurrence. Niger is an impoverished country in West Africa that has consistently ranked among the poorest in the world based on any number of economic measures such as GDP, Human Development Index (HDI) and Multidimensional Poverty Index (MPI). It is landlocked (we all know water is life) and 80% of it lies in the Sahara Desert. It was colonized by the French and gained independence in 1960. As poor as the nation is, it is rich in uranium, which is used for nuclear fuel to provide electricity. Niger is much like many other African countries, rich in resources and raw materials but poor economically.
Approximately three weeks ago, a military coup occurred in Niger. The democratically elected president was ousted by the military and placed under house arrest and is now being charged with high treason. A coup or coup d’état, literally French for “stroke or blow of state” is defined as “an illegal and overt attempt by the military or other government elites to unseat the incumbent leader. A self-coup is when a leader, having come to power through legal means, tries to stay in power through illegal means.” If force or violence are not involved, such an event is sometimes called a soft or bloodless coup. John J. Chin, David B. Carter, Joseph G. Wright (2021), "The Varieties of Coups D'état: Introducing the Colpus Dataset," International Studies Quarterly.
Some coups are successful, some are not. This one in Niger seems to have been successful. Most coups occur in Africa, and this is yet another one. In a previous life as an economics professor, I have researched and written on African coups. Generally, they do not bode well for the nations’ economies. Interesting that coups occur often or exclusively in poor or nations struggling economically, where the impoverished public see the new government as a harbinger of hope. How does the old saying go? “In a storm, any old port will do.” People seeking hope will try to find it anywhere and anyhow.
Coups have been occurring since time immemorial, as long as people were dissatisfied. In post-independence Africa, the first occurred in Egypt in 1952; in sub-Saharan Africa, the first was in 1960 in the Democratic Republic of Congo, and the same year there was a failed attempt in Ethiopia.
Now, this article is not meant as a history lesson but as a brief exposition (not analysis, as data is difficult to access) to the economic effects of coups. I have lived in a country, Ghana, where there were military coups, some successful, others not. In all cases, they were politically and economically destabilizing. Here is a synopsis of some economic impacts of coups, mostly culled from Jihan Abdel Salam’s article at futureuae.com:
More refugees and worsening living conditions and confidence in the system
Economic sanctions and suspension of membership in regional organizations
Blocking economic development as the economy is in upheaval and sanctions may be imposed
Rise in global prices of strategic commodities as there is local struggle over these resources, impacting the supply chain
Booming illegal trade of precious metals, which abound, especially in African countries
Escalating conflict between world powers scrambling for economic influence
Increasing the cost of borrowing and the likelihood of default
The Salam article concludes, “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.”
No doubt, the coup in Niger is destabilizing for uranium production, so the superpowers such as the U.S., China, and even France may have a stake in this.
The situation continues to evolve, so we will have to wait and see.
Kojo Quartey, Ph.D., is the president of Monroe County Community College and an economist. He can be reached at kquartey@monroeccc.edu.
This article originally appeared on The Monroe News: Kojo Quartey: Economic impact of coups
