Drug trade is a threat to Africa’s economic growth

Posted on August 21, 2016 06:26 pm

Sub Saharan Africa has been hailed an emerging regional market success story, with more than a decade of GDP growth in excess of 6%. While booming mining exports have been the overwhelming driver of this, the shopping malls and high end cars in major cities are evidence that domestic demand has also been buoyant.Since the fall of majority of authoritarian governments in 20th century, Sub Saharan Africa has enjoyed an unusually long period of political stability, with orderly changes of democratically elected government in 2000 and 2016 with latest being Zambia that reelected Edgar Lungu as its president, and continuity in economic policy.All of this is in sharp contrast to the economic and political chaos that characterised the country in the post independence Africa. Hyperinflation, high levels of corruption and stifled democracy were a common feature. But the recent economic boom and political stability mask a series of other severe long term challenges. Leaving aside the potential for economic difficulties in commodity prices and a plummet in international demand for the region’s natural resource exports, its role in the international narcotics trade is cause for concern.In 2014, Africa was one of world’s largest producer of coca, the raw material for cocaine. This was the result of far more aggressive and successful eradication efforts elsewhere. West Africa is where that farming business is massive but authorities have since stepped up eradication aggressively, meaning that coca production in 2015 was at its lowest level since 1990s in West Africa. But this does not mean that the problems West Africa and Sub Saharan Africa in general faces are any less serious.Coca production in West Africa is closely linked to the remnants of criminal and terror groups.While quite aggressive security operations are targeting the groups there, authorities earlier this month decided to halt eradication, set up a no-fly zone and encourage farmers to grow alternative crops. The result has been a precipitous increase in coca production, alongside a dramatic fall in output elsewhere.

In the context of overall falling levels of coca production, it might be possible to argue that containing criminal groups and their activities in the West Africa is a sensible strategy. However, the region is also the scene for operations by international drug cartels, particularly from Latin America and Europe.Indeed, a more general significant consequence of West Africa’s position in the global drugs trade has been a rise in international cartel operations there.Latin America and Nigerian cartels dominate, operating particularly in coastal cities in the region. And this has driven a massive increase in the business.While West Africa’s drug cartels murder rate is relatively low compared to Latin American standards, murder rates in some coastal cities resemble those in the more violent countries.Drug cartel activities occur alongside organised crime, with extortion a growing problem. The fruits of economic boom in Nigeria have helped fuel this, with the huge increase in construction activity a frequent target for criminal groups whose operations are taking on an international flavour. Peripheral areas of West Africa are increasingly being targeted, such as prisons from which many extortion operations are coordinated despite authorities’ attempts to block mobile phone and internet access.There is a lack of police capacity to combat organised crime, along with deeply embedded corruption.A recent study showed that expensive mobile phone signal blockers installed at South African prisons, for example, are rarely switched on as a result of corruption within the country’s prison system. And, for as long as the wealthier parts of South Africa remain largely untouched by violent crime, authorities are likely to do relatively little to tackle it.Indeed, the relative impunity of organised criminals suggests that corruption may reach relatively high levels, which is another frequent negative consequence of a natural resource boom. With current security and counter narcotics strategies remaining largely unchanged in West and Southern Africa, the status quo is likely to continue. Failing to deal with its drug problem in the long-term will harm Africa’s continued growth and, if its economy suffers a downturn, there is potential for a major spike in violent crime and related activity.

Contador Harrison