Since the beginning of 2021, there have been signs that democracy has been eroding in parts of West Africa, raising concerns about the operating environment for organizations and multinationals in the region. In Niger, a suspected coup attempt against newly elected President Mohamed Bazoum occurred in March, a coup took place in Mali in May, and General Mahamat Idriss Deby seized power in Chad in April. The most recent such incident is that in Guinea on Sept. 5.
Weak State Systems Increase Political Tensions
President Alpha Condé, Guinea's first democratically elected president, was seen as a modernizer when he came to power in 2010, though quickly resorted to authoritarian practices. A crackdown on opposition figures and supporters, including the imprisonment of numerous political activists, followed with violations of fundamental rights, such as recurrent bans on demonstrations, restrictions on the freedom of the press, and suspected unfair electoral practices. Corruption at all levels of the state and mismanagement of the economy contributed to the fall in support for Condé.
Constitutional reform in March 2020, which allowed him to run for a controversial third term, prompted a backlash from political opposition groups, which resulted in large-scale protests and clashes with security forces. The ensuing violence led to numerous deaths and significant property damage, further damaging Condé's popularity. Widespread discontent occurred in July 2021, when the government increased taxes on several goods, including oil, prompting a price hike. The country sank into an economic crisis triggered by years of perceived weak governance and corruption. Political and economic issues, compounded by the COVID-19 pandemic, eventually led Lt. Col. Mamady Doumbouya to lead the Sept. 5 coup that ousted Condé.
Doumbouya's reported justification for the coup was to "put an end to years of poor governance" and has been popularly welcomed; celebratory gatherings took place in various parts of the country, including Conakry. The National Committee of Reconciliation and Development (CNRD), subsequently created and led by Doumbouya, took power, and announced the suspension of the constitution and the dissolution of the government; regional military commanders have also replaced civilian governors. A government of national unity is to be put in place to lead the transition, the details of which have not been announced.
Regional Organizations' Response
It is difficult for international organizations such as the African Union (AU) and the Economic Community of West African States (ECOWAS) to enact restrictive measures in response to a coup. If ECOWAS were to impose economic sanctions against juntas, the impact on trade operations would be significant. ECOWAS imposed sanctions in the wake of the previous coup in Mali in August 2020, disrupting the country's supply chains, adversely affecting the economy, and causing widespread discontent. For these reasons, ECOWAS decided not to implement sanctions against Guinea.
However, the organization eventually decided to freeze the financial assets of and impose travel bans on Guinea's junta members and their relatives, insisting on a short transition, not exceeding six months. It remains unclear whether this pressure will be sufficient to coerce the junta to respect these conditions and expedite a return to democratic rule.
The perceived adherence of the local populations to some of these political upheavals makes the situation even more complex. Deposing a ruler may be popularly perceived as necessary if the intention is to end a dictatorial or inefficient regime, overthrow a government that is not providing for the wellbeing of its citizens and the security of its territory, or ousting leaders who change national laws to remain in power. Such adherence makes it difficult for any organization to enact any strong sanction that would not be met with defiance by the population.
Ensuring Investment and Operations
Countries with a significant presence in Guinea will want to ensure the political developments do not disrupt their economic interests. The Russian company Rusal is the world's main producer of aluminum, with mining operations in Guinea for extracting bauxite, the main source of the metal. The economic uncertainty that followed the coup led to a rise in the global price of aluminum, prompting Russia to denounce the coup and demand a return to constitutional norms. In essence, the potential impact of the coup on future bauxite mining operations influenced Russia's reaction.
Further political tensions over the transition could worsen the business environment. Perceived unfair transition rules, unconstitutional maintenance of military rule, increased insecurity, and economic hardship, may lead to discontent. Associated civil unrest and violence could derail the transition while significantly disrupting commercial operations. Protests, road blockades, acts of looting, or increased instances of strikes are signs of a deteriorating business environment. How – if at all – the current rulers commit to a handover of power to a civilian authority will impact the stability of the operating environment in Guinea.
Outlook
Looking ahead into 2022, if a return to civilian rule does not occur, Guinea, like other West African nations, will most certainly witness a period of greater instability. Such weakened state systems resulting from years of mismanagement coupled with a slow economic recovery from the COVID-19 pandemic will likely increase political tensions.
Uncertainties towards the country's political stability increased instances of unrest could impact business operations and the price of raw materials on the global market. In areas already experiencing a challenging business environment due to a lack of infrastructure and rampant corruption, a worsening political and security situation would exacerbate challenges to business operations.
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