Islamist threat to spread to new areas in West Africa

Subject Outlook for Islamist militancy in West Africa. Significance Over the past four months Islamist armed groups have carried out high-profile attacks in Burkina Faso, Ivory Coast and Mali. Such incidents are not new in the Sahel, but the methods and scale have changed. To some extent this mirrors changes seen in Nigeria, Kenya, the Middle East and Europe, where attackers explicitly target civilians in a bid to attract media attention. Impacts The risk of further attacks is unlikely to shift positive investor sentiment towards Ivory Coast, which is driven by strong GDP growth. Airport security will likely come under fresh scrutiny given recent bombings and hijackings in Somalia and Egypt respectively. Cameroon is vulnerable to further attacks given its involvement in the regional anti-Boko Haram force.

Subject AQIM assessment. Significance Al-Qaida in the Islamic Maghreb (AQIM) has garnered media attention over the past year with a string of 'spectacular' attacks against Westerners in West Africa: with attacks in Bamako, Mali in late 2015, Ouagadougou, Burkina Faso, in January 2016, and Grand Bassam in the Ivory Coast in March. Its increasing range of operations raises questions about the group's organisational structure and its strategy. Impacts More terrorist attacks in North and West Africa will adversely affect tourism in those regions. This would particularly affect Tunisia, Ivory Coast, Senegal and Egypt. The resurgence of AQIM could also mean that it increasingly entrenches itself in Libya too.


Significance While the overall number of incidents is fewer than a dozen since the rise of the region's jihadist insurgencies in the early 2010s, the trend lends credence to growing warnings about the jihadist threat to coastal West African countries. Concern has focused on Ivory Coast and Benin, but there is also nervousness about Ghana, Togo and even Senegal. Impacts Western governments will boost security assistance to coastal states. Intelligence sharing and joint operations will not forestall cross-border hit-and-run attacks. Most regional states will resort to security-focused responses whose abuses drive jihadist recruitment.


Significance Mass protests took place yesterday in Niger's capital against the insurgency, while Chad's military announced training exercises with the United States to "warm up" for the fight. Over the past year, Boko Haram militants have encroached from north-east Nigeria into remote border areas of Cameroon, Chad and Niger. The regionalisation of the insurgency and the response will see the intensity and impact of the conflict increase. Impacts Population displacements could become a significant problem, bringing added instability risks to the border region. The risk of attacks on international aid organisation personnel will grow as they seek to deliver aid to affected communities. The conflict will not yet impinge on oil operations in Chad and Niger; existing fields and infrastructure are not close to affected areas.


Subject West Africa ports development. Significance Economic growth and rising trade volumes with Asian countries are straining West Africa's commercial port capacities. Various port infrastructure projects are underway as states compete to become shipping gateways for the region. Ever larger container ships are also forcing states to offer deeper water berth ports. Ivory Coast, Ghana and Nigeria are leading the race. Impacts Low oil prices should not affect port expansion as the costs are borne by competing private sector operators. The question of whether the operator-driven port model delivers equivalent benefits to individual economies will grow as profits rise. European private sector port operators continue to dominate, but competition from Asian companies such as DP World is growing.


Significance Morocco has been seeking re-admittance to the AU and has spent the past two years courting its African neighbours. King Mohammed VI toured West Africa in 2014 and concluded 2016 with a tour of East Africa and a crucial visit to one of the continent's powerhouses -- Nigeria. Impacts Morocco will aim for more economic cooperation with Nigeria regardless of the AU summit outcome. Tension with Algeria, the SADR's main backer, will intensify. If Morocco wins re-entry into the AU, this will help ensure greater diplomatic coverage with other international bodies such as the UN.


Subject The effect of illicitly-governed spaces Significance Spaces where armed groups are equally, or more present than the state often tend to go unnoticed unless they garner media attention with high-profile violence. There, such groups exert authority over local populations and engage in illegal business activities. These operations allow them to accumulate power and resources potentially to stage attacks elsewhere. Targeting these spaces and restoring legitimate governance are necessary to deprive armed groups of social support and end illegal businesses. Impacts Providing basic goods and services would help authorities regain legitimacy in illicitly-governed regions. However, cracking down on illicit activities, such as smuggling, could deprive some communities of their only source of income. Economic aid and development would, therefore, need to accompany any such clampdowns.


Subject The macroeconomic outlook for China. Significance Despite fears of a slowdown, China has kept up GDP growth of 6.8% year-on-year for three successive quarters. However, key measures of economic activity have weakened, and tensions are escalating with the United States over trade and technology. Impacts A swathe of new financial regulations and high-profile arrests will likely continue in 2018. Negotiations are likely to alleviate the immediate pressure from Washington, but underlying concerns over the tech sector will continue. A recently announced sweeping government reorganisation will be implemented, helping to tackle financial and environmental risks.


Subject West Africa cocoa outlook. Significance Strong demand for chocolate is helping to lessen the global cocoa supply glut. This could underpin a more stable recovery in prices amid bumper crops in the world’s top two cocoa growers, the Ivory Coast and Ghana. On the supply side, efforts to reduce production will likely face headwinds over practical fiscal and livelihoods considerations. Impacts The stability of global consumption growth may be clouded by one-off domestic factors driving growth in some countries. Output restrictions in Ivory Coast and Ghana may be undermined if planned Nigerian and Cameroonian increases of cocoa materialise. Quality issues will be a natural hedge against smuggling in Nigeria and Cameroon where beans are sold at a discount.


Subject West Africa cocoa prospects. Significance Global cocoa markets are expected to remain oversupplied during the 2017/18 planting season, with Ivory Coast and Ghana -- which together account for 60% of world supplies -- expected to produce 1.9 million tonnes and 850,000 tonnes respectively. Thereafter, the slump in prices could deter investments in plantations, particularly in Ivory Coast where the farm gate price has been slashed. This could could sow the seeds of a new boom cycle -- especially if it compounds longer-term supply bottlenecks that have resulted from underinvestment in rehabilitating ageing and diseased tree stocks. Impacts Deforestation from cocoa farming will come under increased scrutiny as a result of international goals to combat climate change. Health trends in Western markets could reduce structural appetite for cocoa products amid flagging demand in emerging markets. Farmers are likely to switch to other crops like rubber and palm oil if prices fail to recover quickly.


Subject Prospects for West Africa in 2018. Significance Ruling coalitions will emphasise economic recovery (Nigeria) and foreign investment gains (Ivory Coast), while fragile transitions beckon for post-conflict states (Sierra Leone). Militant terrorist threats are plaguing countries across the region (Burkina Faso, Mali, Niger, Nigeria), heaping added pressure on ruling alliances to improve counter-terrorism preparedness.


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