For the year 2020, the African Union, chaired by South Africa, will pursue as its principal aim the silencing of the guns. It has its work cut out, as the continent also braces itself for combating the COVID-19 outbreak. The number of terrorist attacks in Africa has grown from some 400 annual attacks in 2007 to over 2,000by 2016, with well over 13,182 killings. In the most recent report by the Global Terrorism Index, two of the countries which saw highest increases in terrorist attacks were in Africa; Egypt and Somalia, with deaths increasing by 123per cent and 93 per cent respectively from 2017. The continent’s gun-wielding forces, therefore, come in various forms, as terrorist groups have mushroomed all over the continent, and are increasingly unpredictable and internationalised; with African groups being allied to jihadist groups from the Middle East, whilst also recruiting locally, using ethnicity as a benchmark. Whilst effective, this approach works mainly because of its moorings with the local context. Consider Burkina Faso for example, where “the combination of poverty, a lack of public services, security forces’ inefficiency and neighbouring countries’ instability has contributed to the growing radicalisation of civil populations,” according to a recent study by Mahamoudou Savadogo, who adds that the brutality and geographic reach of tactics used by the terrorists in turn increases the likelihood of support by local communities in locales where the government has an absence or, when present, approaches them with suspicion, curbs liberties and civil rights as well as developmental assistance.
Economics and terrorism have well-documented interaction. The latest Global Terrorism Index (GTI) report notes that the global economic impact of terrorism was US$33 billion in 2018. Some context is needed here. For example, compared to other forms of violence, terrorism is a small percentage of the total global cost of violence, which was equal to 14.1 trillion dollars in purchasing power parity terms. However, it should be noted that these numbers are on the conservative side, and do not account for the indirect impacts on business, investment and the costs associated with security agencies in countering terrorism. As the same report acknowledges, “terrorism also has wide-ranging economic consequences that have the potential to spread quickly through the global economy with significant social ramifications.” In the global context, Africa is also among the more disproportionately affected regions.
Countries facing terrorist activity are found to have lower economic growth through lower investment on physical and human capital, higher cost of capital, and lower non-military consumption. Perhaps the most direct manner through which terrorism affects economic outcomes is in its discouragement of foreign tourism. Overall, terrorism has been found to decrease foreign direct investment flows by exerting a significant impact on the allocation of productive capital and reducing the expected returns to investment, and at the same time terrorism encroaches on bilateral trade flows by raising trading costs and hardening borders. This is particularly worrisome for Africa, in light of its goal of accelerated intra-continental trade through the Continental Free Trade Agreement, whose other face is free movement of people.
The economic time-lag effects of terrorism can vary depending on the conflict status of a country. Observers have noted that terrorism has an economically and statistically significant negative impact on tourism. For example, an empirical study of the Caribbean after September 11 attacks – which had an effect on tourism to the Caribbean due to its regional proximity to the US and the use of the US as a stop-over by many Caribbean-bound tourists – the relationships between terrorism and low tourism tended to be at their strongest in for two years following the incident. In the case of Nigeria, in 2019 the cost of terrorism in terms of lost GDP per year is estimated at 0.82% as the government had to appropriate funds to combating terrorism, the reduced tourism potential notwithstanding.
The correlation of inequality and terrorism within and across countries has led to appeals for international aid from within the continent itself. This appears to have universal consensus and goes with common-sense assumptions. However, such consensus may be unwarranted as such a path may not be linear.
In a 2018 study focused on the role of aid in offsetting terrorism in the 1984–2008 period with 78 countries by African Governance and Development Institute’s Professor Simplice Asongu and colleagues found that foreign aid cannot be used as a policy tool to effectively address a negative effect of terrorism on FDI. This is echoed by a 2017-publishedanalysis of 38 countries in Sub-Saharan Africa, the Middle East and North Africa, and South Asia for the 2006–2014 period by Godwin Okafor and Jenifer Piesse who found foreign aid was insignificantly related to decreasing terrorism. In my own 2017 study, I noted Djibouti and Uganda to be the sole exceptions, whilst there were mixed results from Kenya.
The diaspora and expatriates (themselves a consequence of the instability in the continent)on the other hand remain an untapped channel for combating terrorism in the continent as well as offsetting the flight of capital in the wake of perceived vulnerability.
A study which focused on Sub-Saharan Africa found that terrorism incidences and remittances were positively correlated, with each incidence of terrorism coinciding with remittance receipts of between US$250, 000 and US$1, 000, 000.In a roundabout fashion, terrorism may lead to an increase in financial inflows, with remittances rivalling and, in some cases, surpassing FDI and foreign aid in many countries in the developing world as a source of foreign income which could in turn decrease the socio-economic causes of terrorism. As the continent grapples with the problem of terrorism, the solutions to its economic causes increasingly appear to lie within the continent itself, as well as its diaspora, which had been the AU’s theme for 2019, who could be more actively institutionalised.
Terrorism stands to be a destructive force for the AU’s significant but precarious gains, including accelerated intracontinental trade, people movement, and gains in FDI. In turn, silencing the guns will, therefore, hinge on economic policymaking and confidence-building and renewed social contracts between the governments and their populaces. If nothing, ensuring this (through its various arms, including the African Peer Review Mechanism), is the raison d’être of the AU, especially in the crises-ridden days presently underway.
