Challenges facing Africa and some of its oil producing countries in 2015

December 16, 2014 | Field Case Studies

By Jacinta Moran | –

Plummeting oil prices coupled with a significant increase in terrorism, and regime instability pose a direct threat to several sub-Saharan African countries the next year.

2015 will ask searching questions for Nigeria’s political climate as the country heads into a crucial election in February. Campaigning comes against a backdrop of sliding crude prices which have crushed an economy which relies on oil for 70% of its income. Opposition in the north to President Goodluck Jonathan’s re-election has deepened because of a deadly insurgency by Boko Haram Islamists in the region.

At least 40 people were killed late last week in two bomb attacks in the city of Jos, the same day the main opposition coalition APC party agreed that former military ruler Muhammadu Buhari will run against Jonathan in the upcoming elections. Buhari is a northern Muslim while Jonathan is a Christian from the oil-producing south, who took office after his predecessor died mid-term in 2010.

Jonathan’s win triggered three days of riots in the north that left 800 people dead and there are fears that the violence will recur as tension rises in the southern cities of Lagos and Port Harcourt.

In the south, especially in Jonathan’s home region of the oil-producing Niger Delta, insist he must be allowed another four years. They argue it would be unacceptable for the first national leader from the region to be bullied out of office after just one term.

In the Niger Delta, Mujahid Asari-Dokubo a former militant leader, threatened violence if Jonathan is not re-elected. Many in the region sharing with Asari-Dokubo’s stand, threaten to cripple the oil industry, and a former group of militants threatened to cut off the supply of petroleum products to the north, if Jonathan is not re-elected.

Robert Besseling, Africa analyst at IHS warns that in the likely case of disputed elections, the risk of severe political violence will continue for several more months after the elections and raise the currently low probability of a military coup.

Elsewhere, South Sudan has postponed a presidential election set for 2015 due to continued instability and violence in the country. Fighting broke out in the world’s newest nation in December, pitting president Salava Kiir’s army against rebels allied with his former deputy, Riek Machar. Thousands have been killed in the fighting between rival ethnic Dinka and Nuer groups. The situation remains fragile with regional mediators acknowledging the lack of political commitment on either side for a peaceful resolution.

Kenyans have grown in increasingly critical of President Uhuru Kenyatta for failing to protect the east African nation from the incessant militant attack, which have killed over 200 people since 2013.

The Somalia militant group, al Shabaab, has been active in East Africa for years, waging an armed campaign that initially aimed to turn Somalia into a fundamentalist Islamic state. But the group’s attacks on Uganda and Kenya indicate its capacity to strike in neighbouring countries.

While al-Shabaab’s power is declining in Somalia, analysts are not confident that the Kenyan government will reach political compromise with the terror group any time soon.

There are several warning signs that the Tanzania elections could result in violence. Opposition to the ruling Chama Cha Mapinduzi party’s dominance over an amendment to the constitution has heightened tensions ahead of elections scheduled for October. The long and drawn out constitution-making process raised long-simmering issues within Tanzania itself such as the relationship between the mainland and the islands of Zanzibar but provided no resolution. Allegations of corruption, rising prices for fuel, and persistent power shortages are likely to increase the opposition’s support and have triggered riots in major cities in the past.

Various intelligence reports warn there is a high possibility of a military coup in the Democratic Republic of Congo (DRC) in early or mid-2015.If this happens; it will draw the Great Lakes region into fresh interstate war with Uganda and Rwanda being key players.

Elections in October in Mozambique brought an end to a two-year insurgency in Sofala that affected transport and coal supplies in the province. But the country’s main opposition, Renamo, rejected as fraudulent results showing the ruling Frelimo party had won the elections. The elections were seen as crucial for the country’s stability as it prepares to reap revenues from large gas discoveries.

The smooth running of next presidential elections in Cote d’Ivoire is crucial to the extent that it will strengthen the West African nation, five years after the pots-elections clashes between supporters of President Laurent Gbagbo and Alassane Ouattara that left more than 3,000 dead.

Buoyed by economic growth and effective political control, the next elections in Ethiopia in May 2015 will likely see another win for the ruling party.

Besseling says other countries where violent risks will improve over the next year include Zambia after its presidential by-election in February and Mali where the government of President Boubacar Keita will improve political stability, apart from the northern regions.

There are appreciable risks of investing in Africa just as there are substantial risks of doing business in Latin America, Middle East and Asia and so on. The continent, of course, is faced with a long list of risks. Political instability, corruption, erratic power supplies, lack of infrastructure and more, but the continent offers the patient investor compelling trade opportunities due to rapid growth and a fast growing population.