African cities have been hit by a wave of protests. Demonstrators in Nairobi, Tunis, Dakar, and Pretoria have taken to the streets to voice their frustration with the lack of action taken by their governments to address, among other things, the rising cost of living.
The opposition Economic Freedom Fighters in South Africa has organised marches against electricity rationing, high unemployment, and low public investment on education, and has called on president Cyril Ramaphosa to resign.
In Nigeria opposition leaders flocked to the streets to protest against what they called rigging in last month’s presidential elections, alongside others demonstrating against fuel shortages and currency exchange issues.
Protesters also marched in Tunisia against growing living costs, insecurity, and President Kais Saied’s push for authoritarian forms of control. Another protest took place in Dakar, and stores in Nairobi’s central business district were closed as the protests intensified.
The main causes of demonstrations are economic challenges which have caused the prices of basic necessities to skyrocket. This has been exacerbated by the political elite in government failing to provide adequate services.
The war in Ukraine is also currently having a highly negative impact on the global economy, with governments all over the world implementing various budgetary measures to alleviate the consequences and provide relief to businesses and families.
The protests can be seen as the culmination of an economic environment that has not been favourable for a number of years now. As a result of plummeting commodity prices and the pandemic, Africa experienced its first recession in 25 years in 2020. Despite some progress in 2021, most countries remained mired in debt and economic instability. Because of the Russia-Ukraine war, expectations in 2022 shifted from a post-pandemic resurgence to a focus on reform.
In light of these trends, African governments have requested financial assistance to alleviate a variety of stresses, including fast rising food and gasoline prices. Surprisingly, focus has shifted to the International Monetary Fund (IMF), though the fund has historically been viewed with distrust throughout Africa due to its legacy of austerity and structural adjustment programmes.
Following World War II, the IMF was founded to help stimulate economic growth and development in war-torn states, and it later extended to assist new nations that gained independence after Western Europe awarded their colonies freedom. In recent decades, the IMF has evolved into a lender of last resort for countries facing severe financial difficulties, when revenues are insufficient to cover basic services and debt obligations.
The IMF has played a significant influence in Africa since the 1960s. Throughout the 1980s and 1990s, the IMF intervened on numerous occasions to lend money to African governments in times of economic crisis.
Although these loans helped several African countries avoid significant economic disasters, the IMF set harsh conditions in exchange for funding. To achieve austerity guidelines, governments were forced to sell public assets like mines and railroads, as well as lower national budgets and, in some cases, cut back on healthcare and education. As time went on, African countries lost faith in the IMF and turned instead to China for financial assistance.
Yet, with the current state of protests and economic hardship, things appear to be changing. Over half of African countries have or are currently negotiating a deal with the IMF. The majority of active programmes were agreed in 2021-22, and the IMF has presently committed approximately US$16 billion to African countries, with more on the way.
Notably, the IMF has reached formal agreement with Tunisia, Ghana, Kenya and Senegal, all of which have seen some form of economic protest in the last few years.
Aside from IMF loans, there are many policy ideas that African countries can implement to reduce the likelihood of cost-of-living-related protests in the future.
Firstly, recovery measures should have a strong structural element to minimise dependence on outside capital flows and global markets and to establish more value-added, knowledge-intensive, and industrialised economies.
Secondly, a commitment to implement the African Continental Free Trade Agreement (AfCFTA) and the African Union’s productive transformation agenda would be helpful as it could effectively bolster regional value chains, limit vulnerability to external shocks, accelerate the digital shift, and build financial stability against future crises.