Post-Conflict Economies in Africa

This is IEA conference volume no. 140

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Post-Conflict Economiesin Africa Edited by

Augustin Kwasi Fosu African Economic Research Consortium, Nairobi and Economic Commission for Africa, Addis Ababa

and

Paul Collier St Antony’s College, Oxford, and Centre for the Study of African EconomiesUniversity of Oxford

in association with theInternational Economic Association

© International Economic Association 2005

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Library of Congress Cataloging-in-Publication Data Post-conflict economies in Africa / edited by Augustin Kwasi Fosu and Paul Collier.

p. cm. — (International Economic Association series)Originally presented at a workshop in Kampala, Uganda, in July 2002 in colloboration with the World Bank and the International Economic Association.Includes bibliographical references and index.

1. Africa—Economic policy—Congresses. 2. Political stability—Africa—Congresses. 3. Africa—Politics and government—Congresses. I. Fosu, Augustin Kwasi. II. Collier, Paul. III. World Bank. IV. International Economic Association. V. Series.HC800.P677 2004330.96—dc22 2004054466

10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 09 08 07 06 05

ISBN 978-1-349-52208-8 ISBN 978-0-230-52273-2 (eBook)

DOI 10.1057/9780230522732

ISBN 978-1-349-52208-8

Softcover reprint of the hardcover 1st edition 2005 978-1-4039-4346-0

v

Contents

The International Economic Association vii

Preface and Acknowledgements ix

List of Participants and Contributors x

List of Abbreviations and Acronyms xii

Introduction: Post-Conflict Economies in Africa xv Augustin Kwasi Fosu

Part I Thematic Issues

1 Post-Conflict Reconstruction in Africa: Some Analytical Issues 3 Tony Addison and S. Mansoob Murshed

2 The Economic and Political Consequences of Conflict and Implications for Post-Conflict Recovery in Africa 18Ibrahim A. Elbadawi and Njuguna S. Ndung’u

3 Economic Policy in Post-Conflict Societies 45Paul Collier

4 Ethnicity, Institutions of Governance and Conflict Avoidance 57 Mwangi S. Kimenyi

Part II Case Studies: West Africa

5 Liberia and Sierra Leone: Interwoven Civil Wars 77 Victor A. B. Davies

6 The Nigerian Civil War: Causes and the Aftermath 91Abdul-Ganiyu Garba and P. Kassey Garba

7 The Economics of Civil Conflict in Africa: The Case of Chad 109 Nadjiounoum Djimtoingar and Djona Atchénémou Avocksouma

Part III Case Studies: The Horn, East and Central Africa

8 Conflict, Post-Conflict and Economic Performance in Ethiopia 125 Alemayehu Geda and Befekadu Degefe

vi Contents

9 Prospects for Sustainable Peace and Post-Conflict Economic Growth in the Sudan 143 Ali Abdel Gadir Ali and Ibrahim A. Elbadawi

10 Entrenching Peace in Post-Conflict Economies: The Case of Uganda 163Michael Atingi-Ego and Rachel Kaggwa Sebudde

11 The Challenge of Transition from War to Peace in Burundi 180 Janvier Désiré Nkurunziza and Floribert Ngaruko

Part IV Case Studies: Southern Africa

12 The Political Economy of Post-Conflict Economic Recovery: Making Peace Substantial in Mozambique 197Laudemiro Francisco and Edwin Connerley

13 Transformation for Post-Conflict Angola 213Fátima Moura Roque

Part V Conclusion

14 Post-Conflict Economies in Africa: Synthesis and Lessons 231 Augustin Kwasi Fosu

Index of Names 241

Subject Index 245

vii

The International Economic Association

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The IEA has, since its creation, sought to fulfil that purpose by promotingmutual understanding among economists through the organization of sci-entific meetings and common research programmes, and by means of publi-cations on problems of fundamental as well as of current importance.Deriving from its long concern to assure professional contacts between Eastand West, and North and South, the IEA pays special attention to issues ofeconomies in systemic transition and in the course of development. Sinceits inception it has organized more than a hundred round-table conferencesfor specialists on topics ranging from fundamental theories to methods andtools of analysis and major problems of the present-day world. Participationin round tables is at the invitation of a specialist programme committee, butthirteen triennial World Congresses have regularly attracted the participa-tion of individual economists from all over the world.

The Association is governed by a Council, composed of representatives ofall member associations, and by a fifteen-member Executive Committeeelected by the Council. The Executive Committee (2002–2005) at the timeof the Lisbon Congress was:

President Professor János Kornai, Hungary Vice-President Professor Bina Agarwal, India Treasurer Professor Jacob Frenkel, Israel Past President Professor Robert Solow, USA President-Elect Professor Guillermo Calvo, Argentina Other Members Professor Maria Augusztinovics, Hungary

Professor Eliana Cardoso, World Bank Professor Duardo Engel, Chile Professor Heba Handoussa, Egypt Professor Michael Hoel, Norway Professor Jean-Jacques Laffont, France Professor Andreu Mas-Colell, Spain Professor Kotaro Suzumura, Japan

viii The International Economic Association

Professor Alessandro Vercelli, Italy Advisers Professor Fiorella Kostoris Padoa Schioppa, Italy

Professor Vitor Constancio, Portugal Secretary-General Professor Jean-Paul Fitoussi, France General Editor Professor Michael Kaser, UK

Sir Austin Robinson was an active Adviser on the publication of IEA Con-ference proceedings from 1954 until his final short illness in 1993.

The Association has also been fortunate in having secured many out-standing economists to serve as President: Gottfried Haberler (1950–53),Howard S. Ellis (1953–56), Erik Lindahl (1956–59), E. A. G. Robinson (1959–62),Ugo Papi (1962–65), Paul A. Samuelson (1965–68), Erik Lundberg (1968–71),Fritz Machlup (1971–74), Edmund Malinvaud (1974–77), Shigeto Tsuru(1977–80), Victor L. Urquidi (1980–83), Kenneth J. Arrow (1983–86),Amartya Sen (1986–89), Anthony B. Atkinson (1989–92), Michael Bruno(1992–95), Jacques Drèze (1995–99) and Robert M. Solow (1999–2002).

The activities of the Association are mainly funded from the subscriptionsof members and grants from a number of organizations. Support fromUNESCO since the Association was founded, and from its InternationalSocial Science Council, is gratefully acknowledged.

ix

Preface and Acknowledgements

In recent years there has been considerable conflict in the form of civil warsacross the African continent. To inform policy-makers and analysts, theAfrican Economic Research Consortium (AERC) has focused on post-conflicteconomies as part of its research portfolio under the Special Workshop (SW)modality, which provides research on a topical policy issue for dissemin-ation in a relatively short period of time.

The chapters in this volume were originally presented as papers at a SpecialWorkshop in Kampala in July 2002, the result of collaboration with the WorldBank, which has also worked extensively on conflict, and the InternationalEconomic Association (IEA), which provides a forum for the analysis anddissemination on important economic issues of international relevance.

The volume consists of five parts comprising a set of thematic papers toinform the reader of the various pertinent issues on post-conflict economics;a number of country case studies drawn from all regions of sub-SaharanAfrica, in order to shed light on the Africa-specific setting; and a section onconclusions. Thus the volume uniquely and richly provides in a comple-mentary format both theoretical and empirical analyses.

Many individuals and organizations have contributed to the success ofthe project. However, specific mentions are in order. First and foremost, theAERC, through its Advisory Committee, has been instrumental in identifyingthe topic and executing the research project. Second, the collaboration ofthe World Bank has been important in bringing the project to fruition.Third, the IEA has served as an important partner through which the qualityof the product has been enhanced and the output disseminated appropri-ately. Much gratitude is due to Jean-Paul Fitoussi of the IEA and the Scien-tific Program Committee, comprising Eliana Cardoso, Paul Collier, AugustinFosu (chair) and Mustapha Nabli. Further thanks are due to HeywoodHadfield and Michael Kaser, IEA General Editor, who supervised the editorialprocess.

It is hoped that the present volume will contribute significantly to thesalient policy dialogue on how to achieve an enduring post-conflict economyfor growth and development, particularly in Africa, where the challengeseems so enormous and the imperative so real.

x

List of Participants and Contributors

*Professor Tony Addison, UNU/WIDER, Helsinki, Finland *Professor Alemayehu Geda, Addis Ababa University, Ethiopia, and School

of Oriental and African Studies, London, UK *Dr Ali Abdel Gadir Ali, Arab planning Institute, Kuwait *Dr Michael Atingi-Ego, Bank of Uganda, Kampala, Uganda *Professor Djona Atchénémou Avocksouma, University of N’Djamena, Chad*Professor Befekadu Degefe, Centre for Economic Studies and Policy Analysis,

Ethiopia Professor Eliana A. Cardoso, Georgetown University, Washington, DC, USA *Professor Paul Collier, St Antony’s College, Oxford, UK and the Centre for

the Study of African Economies, Oxford, UK*Dr Edwin Connerley, United States Agency for International Development

(USAID), Washington, DC, USA *Mr Victor A. B. Davies, Oxford University, UK Mr Nadjiounoum Djimtoingar, Ministère du Plan, du Développement et

de la Coopération, N’Djamena, Chad *Dr Ibrahim A. Elbadawi, World Bank, Washington, DC, USA *Professor Augustin Kwasi Fosu, African Economic Research Consortium

(AERC), Nairobi, Kenya, and Economic Commission for Africa, AddisAbaba, Ethiopia

*Mr Laudemiro Francisco, Howard University, Washington, DC, USA *Dr Abdul-Ganiyu Garba, Ahmadu Bello University, Zaria, Nigeria *Dr P. Kassey Garba, University of Ibadan, Nigeria Professor Mukwanason A. Hyuha, African Economic Research Consortium

(AERC), Nairobi, Kenya Ms Darlison Kaija, Makerere University, Kampala, Uganda Ms Rehema Kakonge, Uganda Manufacturers’ Association, Kampala, Uganda *Professor Mwangi S. Kimenyi, Kenya Institute for Public Policy Research

and Analysis (KIPPRA), Nairobi, Kenya Mr Rubain Batila Kissita, Université Marien Ngouabi, Congo Brazzaville Professor William Lyakurwa, African Economic Research Consortium

(AERC), Nairobi, Kenya *Professor Fátima Moura Roque, Gabinete de Estudos Africano, Lusófona

University, Portugal Mr Paul Mpuga, Makerere University, Kampala, Uganda Mr Adam Mugume, Makerere University, Kampala, Uganda, and Oxford

University, UK

List of Participants and Contributors xi

*Dr Syed Mansoob Murshed, Institute of Social Studies (ISS), The Hague,The Netherlands

Dr Ngila Mwase, UNDP, Kampala, Uganda Professor Francis Mwega, African Economic Research Consortium (AERC),

Nairobi, Kenya Ms Floribert Ngaruko, Université de Nice-Sophia Antipolis, France *Professor Njuguna S. Ndung’u, International Research Centre (IDRC),

Nairobi, Kenya *Mr Janvier Désiré Nkurunziza, Harvard University, USA Dr Marios Obwona, Makerere University, Kampala, Uganda Mr John Okidi, Executive Director, Economic Policy Research, Kampala,

Uganda Mr Francis Okurut, Uganda Women’s Finance Trust, Kampala, Uganda Mr Nichodemus Rudaheranwa, Makerere University, Kampala, Uganda The Honourable Dr Abel Rwendeire, Minister of State for Trade and Indus-

try, Government of Uganda *Ms Rachel Kaggwa Sebudde, Bank of Uganda, Kampala, Uganda Dr Germina Ssemogerere, Makerere University, Kampala, Uganda

*Authors of chapters

xii

List of Abbreviations and Acronyms

ADF Allied Democratic Forces (Uganda) AERC African Economic Research ConsortiumAG Action Group (Nigeria) AIDS acquired immunodeficiency syndrome AMODEG Association of Demobilized War Veterans (Mozambique) ANC African National Congress (South Africa)APC All People’s Congress (Sierra Leone) ATU Anti-Terrorist Unit (Liberia) CBE Commercial Bank of Ethiopia CCFAN Northern Armed Forces Command Council (Chad) CCM Mozambican Christian Council CCSRP Petroleum Revenue Control and Surveillance Assembly

(Chad) CFA Communauté Financière d’Afrique cif cost, insurance and freight CNDD Conseil National pour la Défense de la Démocratie

(Burundi) CNPC China National Petroleum Corporation CNR National Recovery Committee (Chad) CPC conflict and post-conflict country CPI Investment Promotion Centre (Mozambique) CPIA Country Policy and Institutional Assessment (World

Bank) CSIS Center for Strategic and International Studies (United

States) CSM Supreme Military Council (Chad) CSNPD National Committee for Peace and Democracy (Chad) DDR disarmament, demobilization and resettlementDfID Department for International Development (UK) DP Democratic Party (Kenya) DP Democratic Party (Uganda) DRC Democratic Republic of the Congo DUP Democratic Unionist Party (Sudan) ECOMOG Economic Community of West Africa Monitoring Group ECOWAS Economic Community of West African States EPI elite political instability EPLF Eritrean People’s Liberation Front EPRDF Ethiopian People’s Revolutionary Democratic Front

List of Abbreviations and Acronyms xiii

EPRP Ethiopian People’s Revolutionary Party ESAF Enhanced Structural Adjustment Fund FADM Mozambican Defence Force FAR Forces Armées Rwandaises (Rwanda) FDC Foundation for Democratic Cooperation FDD Forces pour la Défense de la Démocratie (Burundi) FDI foreign direct investment FNLA Frente Nacional de Libertação de Angola FNL-PALIPEHUTU Front National de Libération-Parti pour la Libération du

Peuple Hutu (Burundi) FORD Forum for the Restoration of Democracy (Kenya) FRELIMO Frente de Libertação de Moçambique FRODEBU Front Démocratique Burundi FROLINAT National Liberation Front (Chad) FRONASA Front for National Salvation (Uganda) GDN Global Data Network GNPOC The Great Nile Petroleum and Oil Corporation (Sudan) GPA General Peace Agreement (Mozambique) GUNT Transitional National Union Government (Chad) HIV human immunodeficiency virus HDI Human Development Index HIPC Highly indebted poor country IAAC integrated approach to aid coordination (Sierra Leone) ICG International Crisis Group IDA international development assistance IDP internally displaced person IGAD Inter-Governmental Agency for Development IMF International Monetary Fund KANU Kenya Africa National Union KIPRA Kenya Institute for Public Policy Research and Analysis KY Kabaka Yekka (Uganda) LRA Lord’s Resistance Army (Uganda) LTDS long-term development strategy LURD Liberians United for Reconciliation and Democracy MDD Movement for Democracy and Development (Chad) MDJT Movement for Democracy and Justice in Chad MPLA Movimento Popular para a Libertação de Angola NAS Native Authority System (Nigeria) NCNC National Council of Nigeria and the Cameroons NDP National Development Party (Kenya) NEPAD New Partnership for African Development NGO non-governmental organization NIF National Islamic Front (Sudan) NPC Northern People’s Congress (Nigeria)

xiv List of Abbreviations and Acronyms

NPFL National Patriotic Front of Liberia NPRC National Provisional Ruling Council (Sierra Leone) NPV net present value NRA National Resistance Army (Uganda) NRM National Resistance Movement (Uganda) NURP Northern Uganda Reconstruction Programme OAU Organization of African Unity OLF Oromo Liberation Front PPT-RDA Chad Progressive Party PRC People’s Redemption Council (Liberia) PRE Economic Rehabilitation Programme (Mozambique) PRES Economic and Social Rehabilitation Programme

(Mozambique) PRS poverty reduction strategy RENAMO Resistência Nacional Moçambicana RUF Revolutionary United Front (Sierra Leone) SDR special drawing right SLPP Sierra Leone People’s Party SOD Special Operations Division (Liberia) SP Sudan Policy SPLA Sudan People’s Liberation Army SPLM Sudan People’s Liberation Movement SSA sub-Saharan Africa SSS Special Security Service (Liberia) SSTP structural and systemic transformation programme TICAD Tokyo International Conference on African

Development TPLF Tigray People’s Liberation Front UN United Nations UNAMSIL United Nations Mission in Sierra Leone UNDP United Nations Development Programme UNITA National Movement for the Total Independence of

Angola UNLF Uganda National Liberation Front UNMIL United Nations Mission in LiberiaUNOMOZ United Nations Operation in Mozambique UPC Uganda People’s Congress USA United States of America USAID United States Agency for International DevelopmentUSSR Union of Soviet Socialist Republics

xv

Introduction: Post-Conflict Economies in Africa Augustin Kwasi Fosu

1 Introduction

Conflict has occurred throughout history. In Africa, the partition of the con-tinent and creation of modern states using artificial borders often dividedpeoples and forced ethnically diverse groups together, creating the conditionsfor additional conflict. Independence was often contemporaneous with ideo-logogical conflict, as capitalism, socialism and communism competed forsupremacy. Post-independence Africa has been dominated by elite politicalinstability (Fosu, 2003). This form of conflict is observed to have contributedsignificantly to the dismal economic growth and development observed onthe continent (Fosu, 2001, 2002, 2003).

Following independence, there remained ongoing rebel movements inseveral African countries. In many countries, however, the dictatorial leadersappear to have succeeded in suppressing the simmering disputes fuelledprimarily by inter-ethnic rivalries. Indeed, in some instances, the forging ofnation-states through the use of strong central government control probablycontributed to neutralizing the pernicious elements of ethnicity (for example,in Côte d’Ivoire, Ghana, Kenya, Malawi, Tanzania and Zambia). Followingglobal political liberalization, however, open conflict in the form of armedinsurrection developed in several African countries (for example, Liberia,Sierra Leone, Burundi, Rwanda and, more recently, Côte d’Ivoire). Between1990 and 2000 there were some nineteen major conflicts in Africa, mainlyin the form of civil wars (Wallensteen and Sollenberg, 2001).

In this volume the emphasis is on armed insurrections in the form of civilwars and on the economies following them. It is difficult to define a post-conflict economy. Nevertheless, the term is maintained in order to stress theimportance of attaining such a state, as a prelude to achieving the politicalstability required for economic growth and development.

This volume has two themes, which complement each other. The first sectionconsists of four chapters on thematic issues pertinent to post-conflict econ-omies. What factors are likely to result in conflict resolution in order to achievethe post-conflict state? How can that state be maintained in terms of avoidingthe resurgence of conflict? This is followed by country case studies from thesub-Saharan region: West Africa; the Horn, East and Central Africa; andSouthern Africa. These cases were chosen to reflect countries where there

xvi Introduction: Post-Conflict Economies in Africa

have been substantial conflicts since independence. In most instances, thecountries are at the time of writing experiencing relative peace. In somecases, however, conflict is ongoing, though with some reasonable hope ofresolution and with the expectation that the post-conflict state can soon beattained.

2 Thematic issues

Chapter 1: Post-Conflict Reconstruction in Africa: Some Analytical Issues

Tony Addison and Mansoob Murshed model the phenomenon of likelycredibility problems associated with peace agreements in post-conflict situ-ations in the immediate aftermath of civil war, and the risks of conflict recur-ring. Where war provides economic gains to one side, peace is not incentivecompatible and peace agreements degenerate as they become time incon-sistent. The party that has something to gain from surprise warfare will firstagree to peace, but then renege. The levels of conflict chosen by this groupare an increasing function of greed and capturable rents, but decrease with thegroup’s perceived cost of war. Furthermore, in a multiple time framework,uncertainty about the group type that may renege on peace generatesgreater fighting. In particular, higher rates of time preference associated withthe impatience to consume immediately engender greater conflict. In thiscontext, action by external powers could lower the risk of resurgence. Forexample, sanctions, aid and direct intervention can eliminate conflict, as wellas helping in devising ‘commitment technologies’ for peace. This analysis isrelevant to the recent cases of Angola, Burundi, Liberia and Sierra Leone.

Chapter 2: Economic and Political Consequences of Conflict and Implications for Post-Conflict Recovery in Africa

Ibrahim Elbadawi and Njuguna Ndung’u explore empirically the channelsthrough which risk is transmitted to conflict and post-conflict economies.Estimating a system of equations that take into account multi-causal structurein the variables, a number of results emerge. First, these ratify and strengthentwo salient results in the aid-effectiveness literature, based on single-equationestimation, that a sound policy environment enhances the effectiveness ofaid in augmenting growth and reducing poverty, and that the impact of aidis subject to diminishing returns (Collier and Dollar, 2002). Second, that thenon-monotonic impact of variables such as aid effectiveness and social frac-tionalization on the risk of conflict (Collier and Dollar, 2002; Collier andHoeffler, 1998), and debt on growth,1 are supportable. Third, that publicinvestment is the main channel through which the deleterious effect ofconflict is transmitted to the economy. Fourth, that the absence of politicalrights in socially fractionalized societies exposes such societies to higherrisks of conflict. And, finally, that exports tend to increase the risk of

Fosu xvii

conflict by augmenting state revenues, thus providing increased rent-seekingopportunities.2

Chapter 3: Economic Policy in Post-Conflict Societies

Paul Collier details policies which reduce two sets of risks characterizingpost-conflict economies: those leading to the outbreak of the conflict in thefirst place, and those emanating from the conflict itself. Policies to resolvethe first set of risks include:

• raising the growth rate; • setting up transparent systems of scrutiny and controlling revenues from

primary commodities in the short run; • diversifying the economy away from high primary commodity dependence

in the long run; and • attenuating ethnic dominance, such as by guaranteeing the rights of minor-

ity groups, which may require the support of international intervention.

Policies to reduce the second set of risks include:

• providing agreed formulae for sharing government revenues – forexample, between regions, and for public-sector jobs – such as betweenethnic groups;

• minimizing the incentives of groups preferring conflict to revert to this,such as converting rebel groups into political parties;3 and

• providing a recognized positive role for the diaspora – for example, innation rebuilding.

Collier considers three specific areas likely to be differentially important inpost-conflict settings: demobilization; the restoration of the rule of law; andthe rehabilitation of the formal economy. Policies to address these include:

• ensuring that demobilized soldiers are engaged meaningfully in the econ-omy (such as by providing them with adequate access to land);

• re-establishing property rights, followed by the enhancement of legaland judicial systems and of policing; and

• the gradual formalization of the economy, including reducing the taxburden on those in the formal sector.

According to Collier, external aid and good policy have special roles toplay in post-conflict economies. While aid apparently has no direct impactin terms of reducing the risk of conflict recurrence, it can serve an importantindirect role through its ability to increase growth, which can in turndecrease the risk as well as provide reassurance to minority groups that theirrights are being protected. Further, aid is increasingly effective when the

xviii Introduction: Post-Conflict Economies in Africa

policy environment is sound (Burnside and Dollar, 2000). Collier alsounderscores the importance of social policies within the policy environment,such as the inclusiveness of education and health. Similarly, the marginalproduct of sound policies also increases with the level of aid. Furthermore,the policy environment of embryonic post-conflict economies starts out asfragile but improves with time, so the optimal policy might then entailincreasing aid levels over time for post-conflict economies. Additionally, aidcould help to reduce the tax burden on those remaining in the shrunkenformal sector in post-conflict economies, so that gradual formalization ofthe economy can proceed more effectively.

Chapter 4: Ethnicity, Institutions of Governance and Conflict Avoidance

Mwangi Kimenyi highlights the importance of establishing institutionsthat harmonize ethnic interests. Unfortunately, recent democratization reformsthat have introduced political competition are not sufficient to promoteconflict-avoidance. On the contrary, political party competition can intensifyconflict-generating ethnic competition in highly centralized unitary states.Kimenyi proposes the establishment of decentralized institutions of govern-ance comprising ethnically homogenous local units of collective choicepossessing a high degree of autonomy. He suggests that governments basedon ethnicity can be complemented by functional institutions transcendingthe boundaries of ethnicity within a given country.

3 Country case studies

3.1 West Africa

Chapter 5: Liberia and Sierra Leone: Interwoven Civil Wars

Victor Davies observes that Sierra Leone’s civil war between 1991 and 2001,and Liberia’s civil war from 1989 to 2003 are highly interwoven. He analysescommon and idiosyncratic factors causing and sustaining the civil wars inthe two bordering West African countries: natural resource abundance,historical legacies, growth collapse, ethnic rivalries, geography and externalinstigation. After discussing the social and economic consequences, theauthor examines Sierra Leone’s seemingly successful peace process, high-lighting the domestic and external factors that aided it. He also assessesSierra Leone’s post-conflict initiatives and challenges, especially naturalresource management. He then asks why Liberia was at war for so long.Davies attributes much of the blame for the looting and quasi-criminalbehaviour to the head of state, concluding that there is no simple solutionto the Liberia problem, and that any hope for transition to an enduring,post-conflict peace requires continuous international attention.

Fosu xix

Chapter 6: The Nigerian Civil War: Causes and the Aftermath

Based on a concept of conflict as a struggle for supremacy and strategicadvantage by antithetical forces, Abdul-Ganiyu Garba and Kassey Garbaaddress three sets of issues: the primary or root causes of the Nigerian civilwar; the duration and cessation of the war; and the aftermath and risks ofrecurrence. Analysing the emergence and evolution of antithetical forcesbefore and after the formation of Nigeria, the authors conclude that the seedsof civil war were sown in Nigeria’s amalgamation, the way it was governedwhen it was colonized, and the way its independence was arranged. Theiranalysis reveals that the civil war was extended by the interplay betweenconflicting foreign interests and actions, as well as differential domesticinterests, capacities and actions, while the landlocked nature of Biafra reducedthe duration of the conflict.

The risk of conflict recurring has been increased by the exploitation ofasymmetric institutional, political, economic and social relations by post-conflict governments, as well as by the consequent adverse effects ongovernance, macroeconomic management and economic progress. While the2003 elections presented both dangers and opportunities, the landmarkjudgements by the Nigerian Supreme Court in 2001–3 offer a basis for buildinga modern state on the colonial foundations if Nigeria overcomes the currentchallenges.

Chapter 7: The Economics of Civil Conflict in Africa: The Case of Chad

Nadjiounoum Djimtoingar and Djona Avocksouma argue that the Chadconflict is inherently internal, since it involved Chadian belligerents andtook place within the country. Although the civil war broke out in 1979 andlasted until 1982, the genesis of the conflict can be traced back to the 1960s.The establishment in 1966 of the first politico-military movement, theNational Liberation Front (FROLINAT), marked the first armed oppositionto the government since independence in 1960. However, the change to aFROLINAT government worsened the hostilities. Lacking sound public man-agement strategies, succeeding governments – from President Goukouni’sNational Union Government to Presidents Habré and Déby – becameembroiled in side issues far from the concerns of the northern and southerncommunities.

Chad has not enjoyed widespread peace since President Déby seizedpower in 1990: pockets of resistance still operate in both the northern andsouthern regions, casting doubts on the credibility of the north–south,Muslim–Christian and animist, and pastoralist–farmer cleavages as the causesof the conflict. The costs of the ongoing conflict have been enormous. Mine-clearing operations cost an estimated US$88 million, while demobilizationand integration of combatants cost even more. The most important factorremains a lack of self-confidence among Chadians. Governments have been

xx Introduction: Post-Conflict Economies in Africa

unable to mobilize the nation because of poor governance, institutionalizedinsecurity and ethnicization of public management. Several attempts havebeen made to resolve the conflict with the help of third parties, but theseefforts have been only minimally successful. Indeed, successive govern-ments have not accepted democratic succession, and negotiations have onlysucceeded in absorbing opponents into the government. Unfortunately,promises made are binding only to the signatories and conditions for transi-tion to a peaceful, post-conflict phase are far from satisfied. Despite possibleethnic or religious undertones, bad governance is the key cause of theconflict.

3.2 The Horn, East and Central Africa

Chapter 8: Conflict, Post-conflict and Economic Performance in Ethiopia

Ethiopia has had a long history of relative cultural homogeneity, notwith-standing the large number of ethno-linguistic groups. Nevertheless, that longhistory has been punctuated by a number of conflicts, including the lastreligious war fought between the Christians and Muslims in the sixteenthcentury, and the era of the princes in the nineteenth century. According toAlemayehu Geda and Befekadu Degefe, the more recent periods of conflicthave been the imperial era, which lasted until the fall of Haile Selassie in1974; the 1974–91 Dergue period, during which a civil war took place; andthe 1998–2000 Ethiopia–Eritrea war. While the conflict of the imperial periodinvolved rivalries among the aristocracy over the benefits of control of thepeasantry, the 1974–91 conflict mainly entailed rivalries among the educatedelites. Similarly, the 1998 Ethiopian–Eritrean war most probably resultedfrom a miscalculation as each side threatened the other with military powerin search of a more favourable bargaining position following the agreementon Eritrea’s secession from Ethiopia in 1993.

In Ethiopia, the post-conflict periods have so far been relatively brief asthere has been a pattern that the means of resolving one conflict sows theseeds of the next. This phenomenon deserves special attention, if an enduringpost-conflict period is to be fostered.

International intervention is also recognized as having played a salientrole, either as a catalyst, or a restraint, of conflict. With the end of theCold War the geopolitical importance of Ethiopia has diminished, thusattenuating the catalytic role of international interventionism. In the finalanalysis, however, Alemayehu Geda and Befekadu Degefe believe that themajor cause of conflict in Ethiopia lies in the political economy and isunderscored by competition for power. If so, then the apparent solutionfor achieving a more stable post-conflict economy is a strategy to minimizesuch competition. One such potential mechanism might involve theestablishment of a democratic system that makes leaders more accountableto the people.

Fosu xxi

Chapter 9: Prospects for Sustainable Peace and Post-Conflict Economic Growth in the Sudan

The Sudanese conflict, at the time of writing, spanning more than thirty-eight years of civil war since independence in 1956, is characterized by religiousand cultural divides between north and south, according to Ali Ali andIbrahim Elbadawi. These fundamental divides dominate the country’s tribaland regional interaction between north and south and within the regions.While the north–south divide explains external interventions, culture andreligion account for the relatively high risk of conflict predicted for Sudan.The conclusion, according to the authors, is that these two realities aboutthe Sudanese conflict are the key to understanding why the war started andwhy it has persisted for so long. Furthermore, these realities define severalpreconditions for sustainable peace, including the centrality of a genuinedemocratic transition in both the north and the south.

The failure of the 1972 Addis Ababa peace accord, which allowed elevenyears of fragile peace, shows the importance of democracy for sustainablepeace and viable economic management in a divided Sudanese society. Theaccord finally broke down as a result of the autocratic rule of PresidentNimeiri, who, inter alia, attempted to impose Islamic law on the south. Theauthors argue that party-based democracy is the most viable instrument forpromoting stable and developmental bargaining processes among poten-tially conflicting social groups. Unfortunately, the peace initiative under theauspices of the Intergovernmental Authority for Development (IGAD),being confined to the two main military protagonists, does not seem toaccommodate this basic but crucial lesson.

With the emergence of Sudan as an oil-producing country, transparentand democratic governance becomes even more critical. International evidencesuggests that dictatorships (as well as unstable factional democracies) havealmost always failed to harness oil resources for development. Instead, undersuch regimes, oil resources have been associated with deepened poverty,social cleavages and conflict. Even if peace cannot be achieved without par-titioning the country, the transition to democracy in both future stateswould be critical. Given current conditions in the Sudan, partition withoutdemocratic transition risks replacing a civil war with an international warbetween two autocratic and non-representative regimes, both of which mayalso risk internal conflict.

Chapter 10: Entrenching Peace in Post-conflict Economies: The Case of Uganda

Michael Atingi-Ego and Rachel Sebudde show that, since independence in1962, there has been at least one conflict in Uganda during each decade.Between 1964–6 the crisis was an ethnic power struggle which resulted insuspension of the Constitution, as well as detentions and killings of Bugandancivilians. In 1971, Idi Amin replaced President Milton Obote via a coup d’etat,

xxii Introduction: Post-Conflict Economies in Africa

and then the liberation struggle between 1978 and 1980 culminated in theoverthrow of President Amin in 1979. Conflict between 1981 and 1986 broughtPresident Museveni to power, since which there have been continuinginsurgencies, mainly in the north and west of the country, although Ugandahas enjoyed relative peace in the post-conflict period starting from 1986.

The authors argue that grievance, exacerbated by weak institutions, hasbeen the main source of conflict. Various factors have led to improvementsof the post-conflict economy since 1986: political reconciliation, includingthe return of some of the former leaders; the restoration of kingdoms; andimproved economic conditions, such as per capita income growth and povertyreduction. Relations with Uganda’s neighbours have improved. Institutionbuilding, with international support, has been important, and has included:

• grassroots democratization; • enhancement of press freedom; • decentralization of power to local government; • public service, market and legal reforms; • a legal framework strengthening commercial jurisdiction, property rights

and the settlement of business disputes; • support for the development of effective civil society groups; • the establishment of a properly functioning financial system as well as

safety nets; and • demobilization of the military and the reintegration of rebels.

The problem of uneven distribution of development remains, however.While the southern part of the country has benefited from the abovereforms, the north has continued to lag behind. Meanwhile, the insurgencyin the north continues. It is hoped that solutions will be found to achieveboth economic progress and abate the insurgency in the north.

Chapter 11: The Challenge of Transition from War to Peace in Burundi

Since independence in 1962, Burundi has had five civil wars: the first was in1965 and the most recent began in 1993. This latest conflict has been thelongest and costliest, and at the time of writing, the situation is barely post-conflict. The cycle of violence has been played out between two ethnic groups:the Hutus, and the minority (but politically and economically dominant)Tutsis. According to Janvier Nkurunziza and Floribert Ngaruko, powerful,self-interested domestic groups have manipulated the apparent ethnic rivalryto their advantage. The authors observe that Hutus and Tutsis lived togetherpeacefully for at least four centuries before the outbreak of hostilities in theearly 1960s, and shared a normative system of governance and a politicalsystem that allowed divergent interests to be reconciled, while social andeconomic activities allowed Hutus and Tutsis to identify themselves asmembers of one nation.

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Thus, post-conflict Burundi can learn from its distant past. Justice is a pre-requisite if the wounds of the recent past are to be healed. This requires animpartial administration to punish those inciting violence for their own self-ish purposes. One way to proceed, the authors argue, is to use a prisoner’sdilemma-based system of amnesty and justice that induces perpetrators totell the truth. Meanwhile, the role of the international community is crucial,not only in terms of engendering confidence for any agreement among thewarring parties, but also in keeping neighbouring countries at bay.

3.3 Southern Africa

Chapter 12: The Political Economy of Post-Conflict Economic Recovery: Making Peace Substantial in Mozambique

Examining the political economy of post-conflict Mozambique, LaudemiroFrancisco and Edwin Connerley argue that the durability of the peace andthe domestic viability of current reforms are dependent on making peacesubstantial. This would require a comprehensive approach to reconstructionand development, including self-rule, proper macroeconomic policies, andbuilding real foundations for social and political integration.

Following the 1992 General Peace Agreement (GPA), Mozambique hasexperienced an impressive economic recovery. However, the GPA failed toaddress the grievances that motivated the combatants, and the risk ofrenewed conflict has therefore remained high. Thus an approach that wouldrealistically foster economic, social and political development is stillrequired. How the main actors continue to perceive the ability of the GPA toaddress their concerns is politically crucial for the viability of reconstructionand development efforts.

Chapter 13: Transformation for Post-Conflict Angola

Fátima Moura Roque writes that Angola was impoverished by twenty-sixyears of civil war. Political interference in economic management resulted inperverse policies, financial sector weakness, opaque public accounts, andcorruption. The death of UNITA leader, Jonas Savimbi, in 2002 was followedby a Memorandum of Understanding which consolidated the ceasefire andthe terms of peace. Though too early at the time of writing to be completelyconfident, the peace seems to be holding.

Post-conflict, Angola must now confront widespread malnutrition; provideaccelerated basic training for 80,000 demobilized soldiers and create safetynets for about 300,000 dependents; reintegrate 4.2 million internally displacedpeople and 500,000 refugees; and address extreme poverty. Following sucha protracted conflict, a strong commitment to national reconciliation isrequired – that is, if the parties are to overcome so many years of resentmentand social exclusion. Meanwhile, democratic governance and good economicfundamentals are essential for the post-conflict transformation.

xxiv Introduction: Post-Conflict Economies in Africa

4 Conclusion

Chapter 14 concludes the volume by synthesizing and drawing lessons from theearlier chapters. The synthesis comprises the following ten themes: colonialhistory; the role of neighbours; the relevance of elite political instability(EPI); the importance of rent-seeking opportunities; the role of child com-batants; the proliferation of cheap weapons; justice: inter-ethnic and classinequities; justice and impartial, effective legal systems; the role of the inter-national community; and the importance of democracy.

Notes

1 See, for example, Fosu (1996); Elbadawi, Ndulu and Ndung’u (1997). While the latterfinds a non-monotonic impact of debt on growth based on a quadratic specifica-tion of the debt variable, the former employs an analysis-of-covariance model andfinds that the debt effect is positive when the level of investment is low, butbecomes negative at a sufficiently high level of investment, suggesting that themarginal product of capital decreases with the level of debt.

2 This result supports the finding in the literature that the prevalence of lootablecommodities, especially primary exports, tends to raise the risk of civil war (Collierand Hoeffler, 1998). It also provides support for the result based on a more generalconcept of conflict in terms of ‘elite political instability’ (EPI). Fosu (2003), forexample, finds that a higher exchange rate misalignment tends to raise the likeli-hood of EPI in African countries.

3 Not only might such a strategy convert, to use Mancur Olson’s words, ‘roving ban-dits’ into ‘stationary bandits’, but possibly to responsible non-bandits.

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