Introduction
Economic and resource sovereignty are two interrelated concepts central to the discourse on national autonomy, sustainable development, and global equity. A nation’s ability to independently make decisions about its financial systems, trade policies, and overall economic strategy without undue influence from external actors defines economic sovereignty (Agnew, 2005). Resource sovereignty, on the other hand, emphasises the control and management of a country’s human capital and natural resources—such as minerals, energy, water, and land—by its people and government (Duruigbo, 2006; Pereira & Gough, 2013). Together, these concepts are fundamental to a nation’s self-determination and capacity to shape its developmental trajectory.
Natural resources are a country’s assets. Thriving domestic businesses and a stable, liquid currency are a country’s resources. The human capital and infrastructure needed to extract resources and goods, deliver them to markets, and integrate them into international commerce are also essential components (Auty, 1998). When external actors exploit conditions, dictate terms, or broker opaque deals to avoid public scrutiny, it risks undermining national sovereignty and dragging down a nation.
Sovereignty has evolved over centuries, influenced by colonisation and globalisation. During colonial times, regions lost autonomy as imperial powers exploited their natural and human resources for industrial revolutions (Mann, 2012). This legacy continues to shape modern challenges to sovereignty, as post-colonial states often inherited resource extraction-based economies without diversification mechanisms (Thies, 2009).
In the present era of globalisation and economic integration, sovereignty faces new challenges. International financial institutions and multinational firms frequently influence domestic economic policies, making it harder for countries to set their agendas (Stiglitz, 2017). For instance, the International Monetary Fund (IMF) mandated that countries liberalise trade and privatise state-owned enterprises as part of their structural adjustment programs in the 1980s and 1990s, often at the expense of local control over critical industries (Klein, 2007).
The global competition for vital resources, such as rare earth elements essential for technology and renewable energy, underscores the growing importance of resource sovereignty. The conflict between resource-rich developing nations and resource-consuming industrialised countries highlights the necessity of equitable and balanced resource management (Bridge, 2004).
Western sanctions on Russia, alongside restrictions on Chinese entities, pose significant challenges for countries navigating alliances and economic agreements. These pressures risk pushing nations into arrangements that could expose them to liabilities for circumventing sanctions, raising critical questions about sovereignty, regional coordination, and the ethical conduct of global business (Cafruny & Kirkham, 2020). Conducting business responsibly under international norms provides a better way to level the playing field than succumbing to foreign actors pressuring political and business leaders behind closed doors.
This article explores the dynamics of sovereignty in resource-rich and economically interconnected regions like West Africa, highlighting risks and opportunities, and stressing the need for careful consideration and regional cooperation in the pursuit of this goal.
Challenges to Sovereignty in a Globalised Economy
Sanctions, often used as tools of geopolitical leverage, can have unintended consequences for third-party countries (Fosli, 2023). Western measures against Russian and Chinese actors place nations in a difficult position. A resource-rich country, for instance, considering deals with Russian firms, may inadvertently expose itself to secondary sanctions or reputational risks in global markets. In a world where financial flows and trade networks are intertwined, sanctions are not isolated incidents but global phenomena with broad implications (Farrell & Newman, 2019).
Fiscal independence refers to a government’s capacity to generate and allocate financial resources without excessive reliance on external actors. This involves robust tax systems, the ability to borrow domestically or internationally on favourable terms, and effective budget management (Joumard & Kongsrud, 2003). Monetary sovereignty—the authority to issue and regulate a nation’s currency, control monetary policy, and manage inflation and exchange rates—is equally important (Zimmermann, 2013).
However, dependence on external loans and aid often compromises fiscal sovereignty. Many developing nations are required to comply with stringent conditions imposed by global financial organisations like the World Bank and the IMF. These conditions, such as structural adjustments and austerity measures, can limit policy options and exacerbate economic inequality (Stiglitz, 2017). For example, Ghana, a leading West African economy, is grappling with a severe debt crisis. In 2023, it defaulted on its external debt and sought a $3 billion bailout from the IMF. Critics argue that the IMF’s conditions, including spending cuts and currency devaluation, compromise fiscal sovereignty by dictating domestic economic policies (BBC News, 2023). Unsurprisingly, Ghana’s economic hardship threatened to influence its just-ended general election held on Saturday, 7 December 2024 (Adombila, 2024).
Trade policies, intended to establish tariffs, negotiate agreements, and regulate imports and exports in line with economic priorities, have become sensitive. Industrialised nations often benefit disproportionately, constraining developing countries’ ability to protect emerging industries (Harrison & Rodríguez-Clare, 2010). The African Continental Free Trade Area (AfCFTA), a landmark agreement among 54 African countries, aims to boost intra-African trade and reduce dependency on external markets (Onwuka & Udegbunam, 2019). However, challenges like harmonising tariffs and resolving disputes persist. Nigeria’s temporary border closure in 2019 highlighted the tensions between protecting local industries and adhering to free trade commitments (Oyaliwola, 2020).
Regional Cooperation as a Catalyst for Stability
Amid growing concerns about the dominance of the U.S. dollar in global trade, countries like Brazil, India, and Russia are exploring alternatives. Brazil and Argentina have initiated discussions on creating a common currency for trade within South America, aiming to reduce dollar dependency (Pistili, n.d).
In West Africa, the CFA franc has long been a contentious issue. While it provides fiscal stability for the eight nations in the West African Economic and Monetary Union (WAEMU), critics argue it perpetuates economic dependence on France and limits monetary policy flexibility (Koddenbrock & Sylla, 2019).
National banks are crucial in maintaining liquidity and upholding financial commitments. If the Alliance of Sahel States (AES) countries abandon the CFA franc, significant questions arise. Would they convert their CFA holdings into another currency, potentially flooding the market, or adopt an alternative like the Russian ruble? The collapse of AES economies could reverberate across West Africa, damaging regional economic performance (Bacchetta et al., 2021).
Calls to retreat from multilateral organisations only benefit foreign actors. Regional collaboration can provide the regulatory tools to resist foreign pressures and the corruption they often bring (Mwenda, 2011).
Conclusion
Economic and resource sovereignty are fundamental for national development and autonomy, yet achieving them is a complex balancing act. For West Africa, the path forward requires a commitment to regional collaboration, prudent resource management, and strategic partnerships. While resisting undue foreign influence, nations must also strengthen their institutions, uphold accountability, and align policies with global best practices. The pursuit of sovereignty should integrate nations into equitable frameworks that promote shared prosperity and stability. By navigating these challenges thoughtfully, West Africa can chart a path that secures its future and inspires other regions facing similar dilemmas.
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