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Military coups continue to impose significant economic costs on countries across Sub-Saharan Africa, undermining investment, slowing economic growth, disrupting trade, and weakening long-term development prospects.
This is according to a new report by the International Monetary Fund (IMF) titled “Political Fragility: The Economic Impact of Coups d’État” prepared by Idrissa Aladji Aya and Luc Tucker.
The study found that countries experiencing coups d’état record an average decline of 14.3 percentage points in investment growth, making capital investment the economic sector hardest hit by unconstitutional changes of government.
Beyond investment, the IMF said coups reduce household spending, weaken trade flows, and shave between 1.5 and 3.1 percentage points off annual GDP growth, with the economic effects persisting for years after the political crisis.
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What the report is saying
The IMF’s analysis found that investment bears the largest economic burden following a military takeover, as political uncertainty discourages both domestic and foreign investors.
According to the report, gross fixed capital formation growth is, on average, 14.3 percentage points lower in countries that experience coups.
- “Using the annual growth rates of GDP components as the dependent variable shows that coups d’état have a very large negative impact on investment in particular,” the report stated.
The IMF attributed the decline partly to reduced foreign direct investment (FDI), noting that military takeovers often trigger geopolitical tensions, sanctions, and policy uncertainty that make affected countries less attractive to investors.
The report also found that private consumption growth declines by an average of 2.3 percentage points after coups. Given that household spending accounts for a large share of GDP in most economies, the drop significantly contributes to slower economic growth.
- “The contribution of private consumption to overall GDP growth is reduced by 1.1 percentage points, which is even slightly larger than the lower contribution from investment,” the IMF noted.
Trade is also affected, with import growth falling by 5.5 percentage points and export growth declining by 2.8 percentage points following military takeovers.
According to the IMF, lower imports largely reflect weaker consumer demand and reduced investment activity, while both exports and imports suffer from disruptions associated with political instability.
The study further found that coups reduce annual GDP growth by about 2.3 percentage points in the year they occur, while cumulative economic output over the following five years declines by roughly five percentage points.
- “The effect on GDP is persistent, such that cumulative GDP growth in the subsequent five years is reduced by around five percentage points on average,” the report said.
More insights
The findings come amid a resurgence of military coups across parts of Africa over the past few years, with countries including Mali, Burkina Faso, Niger, Guinea, and Gabon experiencing unconstitutional changes of government.
The IMF said low-income countries and those in Sub-Saharan Africa tend to suffer the greatest economic damage from coups because of weaker institutions and greater dependence on external financing and investment.
The report also found evidence that successful coups inflict greater economic costs than failed attempts and that sanctions imposed by regional and international organisations often amplify the negative effects on growth.
- “In many cases, coups d’état coincide with economic sanctions and this is indeed found to be an important transmission channel,” the IMF stated.
Interestingly, while coups significantly affect investment, consumption, trade, and output, the study found limited evidence of immediate impacts on several monetary and fiscal indicators, including money supply, private sector credit, fiscal deficits, tax revenues, and government spending.
Researchers acknowledged that collecting reliable economic data from fragile states remains a challenge and called for further studies into the broader economic effects of political instability, armed conflict, and state fragility.
What you should know
The IMF’s findings reinforce the economic case for political stability and strong institutions, particularly in Sub-Saharan Africa where many countries are already grappling with debt burdens, inflationary pressures, unemployment, and infrastructure deficits.
In December, the Economic Community of West African States (ECOWAS) declared a state of emergency across West Africa following a surge in military coups and attempted power seizures that continue to destabilise the sub-region.
