Will US war be fatal for Africa?

The US strikes in Afghanistan may be thousands of miles away but analysts warn that the war could be disastrous for Africa. Gawaya Tegulle analyses the possible impact Bad ripples across the global economic pool, cuts in aid, reduced interest in African problems and increased social tension at the expense of Africa are more than likely. Even before the September 11th bombing of the World Trade Centre in New York, the US economy had already slowed down because private consumption, the major engine of the US economy, which contributes more than two thirds of its GDP, had weakened. The GDP growth in the second quarter was a dismal 0.35%, down from the high 5.5% recorded in 2000. But in the wake of the terror attacks, sales fell in nearly every sector of the American economy as gloom spread beyond the airline and travel industries. The terror strikes created confusion in the financial markets as stock markets crashed to their lowest in 10 years. The crisis reduced consumer confidence causing a further slow-down. The collapse of the US stocks did not leave the European stocks standing, owing due to fears that terrorists were likely to attack Europe. “Africa has cause for concern because there could be further decline in consumer confidence since no one knows when the war will end,” says Benon Mutambi, a researcher in Bank of Uganda who adds his views here are personal. “The mighty nations in the coalition are the largest consumers of coffee and cocoa, principal commodity exports from Africa and if their consumption of our exports reduces, our incomes will reduce too. The worst news is that already international prices had ditched low with coffee down from US$1.56 a kilogramme in 1997 to US$0.46 presently.” Mutambi adds. “And if these commodity prices decline further, then many African countries would experience balance of payment problems, meaning the inflow of foreign exchange could be strangled. That could mean increased prices for many commodities,” Mutambi says. Africa’s problem would arise if developing countries cut aid to the third world to meet their financial targets. “The third world depends a lot on the aid from the donor countries,” says Mutambi. “It will be critical how they respond to this war. If they cut or suspend aid, that would be troublesome for countries like Uganda whose budget is 56% donor-funded.” Local American and European diplomats declined to comment on this. Mutambi also observes that petroleum prices could be a cause for concern. How will OPEC (Organisation of Petroleum Exporting Countries) behave? OPEC decides how much oil to release in order to influence prices. So far OPEC has pledged to keep prices reasonable, but the majority of these are Arab and Muslim countries. If anything goes wrong in the fragile coalition against Afghanistan and some Muslim countries that side with the Talibans, that could yield trouble. A slow-down in petroleum exports could hurt Africa real bad. The World Bank also argues that some 10 million Africans will fall below the poverty line owing to the effects of the slowdown in the American economy. Millions of women and children will die owing to inability to afford basic food and medical care. “Altogether, world growth is likely to hit low levels - maybe 2% for the whole world,” says Mutambi. “That is below the baseline 2.5% witnessed over the years,” he adds. The money transfer market is also under pressure. The Federal Reserve Bank (America’s central bank) will question all money transfers, especially after it was discovered that the money for the ignoble operation was wired from outside the US and nobody raised eyebrows. “Politically we are likely to see an upsurge in religious fundamentalism - extremist Islamic groups could be fired up,” says Odrek Rwabwogo, a media researcher. “In South A/*frica there have been demonstrations in Cape Town. We already have problems in Nigeria and Sudan over introduction of Sharia law. Such people will be given more fire in their belly to tighten Sharia screws, especially since this is being viewed by some as Islam versus Christianity. Another researcher in Uganda’s military intelligence expressed fears that “the American policy of questioning democratic policy of countries could go down in exchange for pledges to combat terrorism. “Clinton worked with Uganda, Rwanda and Eritrea despite weaknesses in their democratic spectra, arguing that after all they were focussed and reform-oriented,” he says. “The Bush administration has been pushing for full-blown democratic reform in Africa, but this could go down, as attention turns to America’s biggest threat.” Americans are given to shying away from issues in order to protect their interests. In the cold war America supported dictators like Mobutu Sese Seko of Zaire and Jonas Savimbi, the UNITA icon who has shed millions of gallons of innocent Angolan blood. Perhaps the most significant political impact, says a UN diplomat, is that the Congo war that has been high on the US and UN agenda for many years is now a forgotten issue. Attention is now on Afghanistan. On the social horizon African refugees in the US - notably those from Somalia and Arabic descent and many of whom probably have no interest in the proceedings - are being harassed. Americans are angry that some of the hijackers who had for years, thrived on American hospitality paid them back with the utmost hostility - a most uncharitable currency. America has also tightened its immigration policy, employing the most rigorous screening of all visa applicants. The casual visits are being scrutinised closely and many thrown out. This will definitely rule out many kyeyo seekers who, in some cases, repatriate home much more money than their country’s domestic exports. This is no good economic forecast for Africa. Highlights l Reduction in exports. l Possible cuts in aid. l Increased oil prices. l More than 10 million Africans to fall below poverty line. l Millions could die due to lack of food and medical care. l Tighter controls on money transfers. l Crackdown on kyeyo seekers. l Harassment of Africans of Arab origin. l Reduced interest in African problems. l Upsurge in religious fundamentalism. l Stringent visa rules for intending visitors to the US. ends