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This is not a good time to be a civilian ruler in Africa. Gabon’s “déjà coup” is the eighth unconstitutional ascent to power on the continent in just three years. It comes hot on the heels of a putsch in Niger. Investors are eyeing the resource-rich region nervously. But political volatility will not necessarily translate into economic disruption.
It is not hard to see why companies are alert. Coup-hit countries export crucial commodities. Niger is a major exporter of uranium. Gabon is the world’s fourth-largest producer of manganese, which is used to make batteries. It also produces about 200,000 barrels of oil a day. That is not much in global terms but is important for the national economy.
Moreover, instability is catching. It emboldens opposition in countries where democratically elected governments have disappointed. Rwanda and Cameroon announced military reshuffles the day after the coup in Gabon.
In a power struggle, there is always fear of disruption to business. French manganese miner Eramet briefly suspended production on Wednesday. A knee-jerk 16 per cent drop in the stock was largely reversed on Thursday. Tullow, which produces 20 per cent of its oil in Gabon, also fell sharply.
But large-scale production outages are unlikely. Gabon’s economy relies heavily on natural resources. Oil alone accounted for about 40 per cent of GDP in 2020. The newly-installed military junta will want to see this continuing. Precedent is encouraging. Gold production in Mali rose by 4 per cent last year.
Investors may be concerned that companies navigating choppy waters will sail close to the wind. Glencore was sued on Thursday on the back of corruption scandals. The accusations are a reminder of potential pitfalls.
Yet while the erosion of Africa’s democratic process is concerning, unelected governments are largely replacing poorly performing rulers. These variously failed to maintain security, captured vast swaths of their countries’ wealth or clung on to power with a tenuous claim to legitimacy. The revolving palace doors are unlikely to cause lasting ripples.
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Source link : https://www.ft.com/content/b1d9d568-c1ec-4918-989f-a734d05d9a25
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Publish date : 2023-09-03 07:00:00
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