Sub Sahara Africa: Country Risk Ratings

Angola (AGO)

Angola’s risk is medium high with João Lourenço still President as he has been since 2022. Political interference is high and legal & regulatory risk is very high. As high levels of corruption and inequality remain persistent. Angola continues to promote stability in Africa. There are aiming to mediate and strike an end to conflict in Congo between the Congolese Army and the M23 rebels by aiming to hold talks between both sides but which have not made progress as the M23 rebels continue to advance in Congo. In December, outgoing US President Joe Biden visited Angola as he promises continued US support in the region as Chinese influence grows through investments in the mining industries in Angola. Biden came to Angola to push through the extension of a railway connecting Congo and Zambia through Angola and the Lobito port. The US have given USD550 million towards the project. The risk of doing business in Angola does however remain high. According to the IMF, real GDP will grow 2.8% in 2025 and 3.3% in 2026. Angola’s economy continues to rely on oil production which is expected to rebound after low levels of production last year with Angola leaving OPEC in late 2023. Strong oil and gas exports and higher oil prices will help a current account surplus forecast by the IMF at 1.5% of GDP for 2025 and 1.3% of GDP for 2026. Inflation is however a major issue in Angola, 21.3% estimated for 2025 after 28.4% inflation in 2024, weighing on poorer parts of society and keeping poverty levels high. This had led to tight monetary policy with Angola’s central bank keeping their policy rate at 19.5% in January’s meeting. In addition, the kwanza after heavy depreciation in 2023-24 is now stabilizing after gains in late 2024. Higher oil revenues, the phasing out of fuel subsidises, inflation and growth makes the IMF see government debt to GDP fall in the coming years with 52.1% of GDP expected for 2025 and 44.8% of GDP for 2026, allowing for more fiscal sustainability. Sovereign non-payment risk is medium high and exchange transfer medium. President Biden, during his visit in December, pledged USD1 billion of aid to the African continent but Donald Trump’s administration’s decision to halt USAID will likely distance the relationship to some extent. Supply chain disruption remains medium high with reliance on oil and gas production making Angola remaining susceptible to the fluctuating commodity prices as well as the climate threats (and its impacts on its prominent agricultural sector).  

Benin (BEN)

Benin’s overall risk remains medium high. Patrice Telon remains president and hold of power after his 2021 re-election, strengthened by the success of his two associated parties gaining 81 of 109 seats in 2023’s parliamentary elections. The next set of general elections are set for 2026, where president Telon will be unable to run for a third term. Political violence, political interference and legal & regulatory risk all remain medium high. Compared to its neighbours in the Sub-Sahara region, Benin remains fairly stable, but is not immune to the issues in the area. There remains tensions and conflict in the north of the country from jihadists groups. Benin continues to step up efforts to expand military presence in the region and gain backing from the international community, such as France and the EU. Relations with military-led neighbours Niger remain hostile, (Niger was heavily sanctioned by the ECOWAS). In 2024, Benin prevented Niger from using its port to export oil after Niger closed its border for goods coming in from Benin. In terms of the economy, 6.5% growth in real GDP is forecast for 2025 and 6.2% for 2026, according to the IMF. The ever prominent agricultural sector will support growth alongside various projects such as the Glo-Djigbé Industrial Zone (GDIZ) which aims to completely transform the agricultural sector and claims that it will attract USD 1.4 billion worth of investment and 300,000 jobs into the economy by 2030. Stable inflation at 2% expected by the IMF for 2025 and 2026 and the hope that the central bank (BCEAO) will start an easing cycle from their current policy rate of 5.5% will additionally boost sentiment in the economy. However, high imbalances of government debt and in the current account persist. 52.6% of GDP government debt and a -6% of GDP current account deficit are projected for 2025. Minor improvements to both are anticipated in the coming years, however 85% of the workforce work in the informal economy, according to the World Bank. In addition to this, weak efforts to broaden the tax base will keep likely keep Benin’s economy under some level of debt stress. As a result, sovereign non-payment risk and the inability of the government to provide fiscal stimulus both remain medium high. Furthermore, there is an expectation in the coming decades that Benin and its coastline will become one of the most vulnerable countries to the impacts of climate change, which could be catastrophic for its agricultural sector. Benin is though receiving international support such as USD 80 million under the IMF’s Extended Credit Facility (ECF) program, given Benin’s aim to keep the fiscal deficit below 3% of GDP. The risk of doing business continues to be at a medium high level.

Botswana (BWA)

Botswana’s overall risk remains medium low. This comes after November 2024’s elections saw Duma Boko elected as President with the Umbrella for Democratic Change (UDC) party, winning a majority of 31 of the 61 seats. This was a very significant moment as it was the first time power has shifted from The Botswana Democratic Party (BDP) since independence in 1966. Social frustration amid rising unemployment (over 25% of the working population), rising poverty and inequality helped sway the vote towards Boko and the UDC party taking the vote among young people. Political interference is at a medium level and legal & regulatory risk is medium low, reflecting the stable political system summed up in the successful transition of power at the end of 2024. Botswana’s economy stalled in 2024 recording just 1.0% growth and the IMF anticipate 5.2% growth in 2025 and 4.8% in 2026, boosted by a resurgence in the dominant diamond sector bringing in more revenue boosting foreign exchange reserves and the country’s sovereign wealth ‘Pula Fund’. The sector was halted in 2024 due to weak external demand. Alongside an anticipated recovery in diamond production boosted by an extension to the 50/50 partnership between Debswana Diamond Mining Company and De Beers, an improving tourism industry as well as public investment improvements to improve public services should support growth. The 12 National Development Plan is expected to be in place for the next 5 years promoting reform, reducing inequality and creating sustainable employment and infrastructure. The risk of doing business remains medium. A current account surplus is thus set to persist at 1.5% of GDP for 2025 and 1.3% for 2026, according to the IMF forecast. The Botswanan economy has struggled in combatting inflation since 2022’s peak of 12.2%. 4.5% inflation is forecast by the IMF is 2025 and 2026. Exchange transfer risk is medium and the inability of the government to provide fiscal stimulus remains medium low as government debt is expected to fall to 22.1% of GDP in 2025. Botswana’s debt levels are well below the average level of government debt in Sub Saharan Africa of 61.9% for 2025. In addition, there is now more pressure on Botswana to adapt and diversify in face of the increasing threat of climate-related events with the El Nino climate crisis reducing rainfall and disrupting harvests in 2024. Poor infrastructure, high unemployment and inequalities are seen as the key social issues to tackle for the new administration as Botswana aim to develop the country’s economy and public services.

Burkina Faso (BFA)

Burkina Faso’s risk remains high. Ibrahim Traoré and his military-led government will rule until 2029 after 2024’s elections were cancelled and the transition to democratic elections were put back 5 more years. Political violence is very high and political interference is high. The impact of the unstable security situation persists. The threat of jihadist attacks against Burkina Faso has resulted in many fatalities and the displacement of many more in recent years. The most recent census published in 2023 showed over 2 million people had been displaced. As a result, Burkina Faso have become frustrated with the lack of both regional and international support in fighting off these threats. After ending ties with France in 2023, Burkina Faso have sought greater support from Russia as Captain Traoré stated that Russian troops could be deployed in the region. Burkina Faso alongside other military-led neighbours in the Sahel in Niger and Mali have withdrawn from the ECOWAS and have formed their own alliance, the Alliance of Sahel States (AES) to collectively combat the terrorist threat in the region with 5,000 troops set to be jointly deployed in the region. This position has undermined Burkina Faso’s overall support in the international community. The risk of doing business in Burkina Faso thus remains high. In terms of the economy, 5.8% growth is forecast for 2025 by the IMF and 5.0% for 2026. Growth is set to be boosted by a recovering mining sector with new mines set to open in Burkina Faso. Higher gold prices will improve the current account, -1.2% of GDP anticipated for 2025 and -0.1% for 2026, and strengthen export-led growth but continues to make the economy heavily vulnerable to volatile commodity prices. In addition, the withdrawal from the ECOWAS is likely to create trade uncertainty. Inflation is now more under control with 2% forecast for 2025 and 2026. However, there is a continued high reliance on the agricultural sector which is being affected by the climate crisis, which is significantly damaging food security. Over 40% of the population live in some form of poverty and many have been displaced in recent years. Supply chain disruption is very high. Another issue is the public finances. The IMF estimate 56% government debt to GDP for 2025 and down to 54.8% in 2026. Despite the downwards trajectory, debt remains high and market interest rates are rising, over 9% on 12-month bills. Burkina Faso are however benefitting from support from the IMF’s Extended Credit Facility (ECF) program, giving the country USD 32 million worth of financing in this arrangement. Sovereign non-payment risk is now high and the inability of the government to provide fiscal stimulus is high.

Djibouti (DJI)

Overall risk in Djibouti remains high under the Presidency of Ismail Omar Guelleh since 1999. Political violence and political interference are both high while legal regulatory risk remains very high. Despite being small in size, Djibouti is as strategically important as ever. Being at the entrance of the Red Sea and being the sole route of trade for areas of landlocked Africa such as Ethiopia. In addition, Djibouti is acting as a key military hub for vital NATO countries such as the US and France overseeing the Red Sea, Suez Canal and the threat from the Middle East. Their ever-efficient ports and geographic location is driving FDI from both the US and also China in their Silk Road project, helping Djibouti’s bid to modernise their economy. 6.0% real GDP growth is expected by the IMF in 2025 and 5.5% in 2026 as Djibouti continue to strive towards the goals of modernising the economy in the country’s National Development Plan and Vision 2035, becoming a hub for logistics and trade, such as the Damerjog Industrial Park development. Stable prices with 1.5% inflation in 2025 and 1.8% in 2026.  Meanwhile, government debt is on a downward trajectory with 30.7% of GDP expected for 2025 and 27.6% of GDP are expected for 2026, according to the IMF. Fiscal consolidation measures include cuts in current spending such as on fuel subsidies and boosts in revenue from exports to Ethiopia and the lease of military bases. Sovereign non-payment risk is medium high and the inability of the government to provide fiscal stimulus is medium. Significant downside risks do however persist. A struggling climate with low annual average rainfall of less than 130 millimetres, according to the World Bank, continue to affect the agricultural sector, leaving a high reliance on food imports. Supply chain disruption is thus medium high. As well as a fragile climate, poor governance and corruption in the political and justice system with limited opposition all make the risk of doing business high. Exchange transfer risk also remains at a medium level as the Djiboutian Franc remains pegged to a stronger USD.

Ethiopia (ETH)

Ethiopia’s overall country risk rating remains high, with political violence still very high. Externally tensions with the Somali government remain high, given Ethiopia previously signed an MOU with Somaliland to lease a port and build a military facility on the Red Sea. Tension with Egypt has also escalated in the 2 half of 2024 over cooperation between Egypt and Somalia and Egypt’s concerns that their water supplies will be impacted by the construction of the Grand Ethiopian Renaissance Dam. Turkey is trying to de-escalate the situation, but without success so far. Internal instability also persists in the Amhara region, with reports of renewed violence in early November.  Separately, the aftermath of drought in Tigray in 2024 continues to risk the fragile peace in the North. This all means the political interference and supply chain disruption measures are high. On the economic front, the key news is the USD3.4bln IMF 4-year agreement that has been followed by structural reforms and GDP growth is set to accelerate to 6.5% in 2025.  However, the ongoing large currency depreciation also makes it more difficult to control inflation, projected to be 23.3% by the IMF in 2025. Official lending commitments can help slow the currency decline, but inflation differentials will put pressure on the currency multi-year.  Given the still difficult debt backdrop, the sovereign non-payment risk has remained at high.

Gabon (GAB)

Gabon’s overall risk remains medium high. At present, Gabon is military-led after 2023’s coup. General Brice Oligui Nguema leads the transitional government in Gabon. Gabon’s council of ministers stated that there would be presidential elections on April 12, 2025.  A very positive step for Gabon in its transition as elections are set to go ahead before military ruled neighbours. This announcement in January 2025 boosts international confidence that elections will go ahead after fears that the military junta wouldn’t be willing to give up power. The US have supported this move and the transition by offering Gabon a USD 5 million support package. In addition, sanctions from the ECCAS were dropped against Gabon as they have been reintroduced into the bloc as elections plans have been presented. Political interference and legal & regulatory risk both remain high. In terms of the economy, real GDP is forecast to grow 2.6% in 2025 and 2026, according to the IMF. Hydrocarbon exports are the biggest source of revenue for Gabon, however oil production is stalling with a lack of new fields for production, however FDI into transport and infrastructure construction is set to additionally support growth, as Gabon have set a goal to diversify their economy in the coming years. The fall in hydrocarbon exports makes the IMF estimate a falling current account surplus of 3.1% of GDP for 2025 down to 2.1% of GDP for 2026. A significant issue for the Gabon economy is the high levels of government debt to GDP, 80% forecast by the IMF for 2025 and 85.4% in 2026. The average projected for Sub-Saharan Africa in 2025 is 61.9%. As a result, sovereign non-payment risk remains high. Falling hydrocarbon revenue, alongside high spending this year to fund and organise the election process and continued fuel subsidies will add to the high debt levels. The inability of the government to provide fiscal stimulus remains medium high. However, in November Gabon announced that it redeemed half of its USD 605 million Eurobond due to mature in June 2025, in using their foreign currency reserves, which resulted in a more positive sentiment of Gabon’s commitment to repay debt. 2.2% inflation is projected by the IMF in both 2025 and 2026. Gabon uses the CFA franc as their currency, which is pegged to the euro. A stronger USD expected to weaken the CFA Franc will likely boost competiveness but will put pressure on import inflation. Adding pressure to food security and the issue of poverty in Gabon. The risk of doing business is thus high.

Gambia, The (GMB)

Gambia’s overall risk remains medium high. Adama Barrow remains President after his 2021 election victory. He was elected on the promise of reform to crack down on corruption and improving people’s lives, despite this significant challenge there has been a generally stable picture in recent years in Gambia particularly compared to neighbours in Sub-Saharan Africa. The next set of presidential elections are expected to take place in December 2026. Political violence and legal & regulatory risk both remain at a medium high level. Spain is currently looking to work with Gambia to cooperate with migration and halt migrants coming to Spain and the canaries from Western Africa with Spanish PM Pedro Sánchez visiting Gambia last summer to boost relations. In terms of the economy, the IMF anticipate 5.8% growth in 2025 and then by a further 5.0% in 2026. The economy will continue to rely on the agricultural sector but also boosts in tourism and a surge in remittances in recent years will support growth and also makes the IMF estimate a continued trend of a reduced current account deficit at -2.8% of GDP in 2025 and then -2.1% in 2026. 2024 saw Gambia host the Organisation of Islamic Cooperation (OIC) Summit, in which preparation for hosting the OIC Summit gave an uplift to infrastructure as well as demand in the economy. However, the continued downside risks of high inflation of 9.8% for 2025 and public debt at 60.6% for 2025 persist. As a result, the Central Bank of Gambia’s policy rate has remained restrictive at 17.0% since August 2023, however there are questions about its effectiveness due to the scale of the informal economy. Higher prices, fuelled by a depreciating Dalasi, has caused a heightened cost of living and has once again added to pressure to those on the poverty line. Debt pressure has seen Gambia enter a period of fiscal consolidation with more revenue being generated by import customs particularly. Sovereign non-payment is now medium while exchange transfer risk remains at a medium level. In addition, last year, the IMF approved around 97.3 million USD worth of support for Gambia to support growth, control debt and inflation as well as help promote macroeconomic reform. The risk of doing business remains high. Another significant challenge of present and in the future remains climate change with the risk of flooding from the Gambian river and increasing temperatures adding vulnerability to the ever dependent agricultural sector in the economy. Supply chain disruption is thus at a medium high level, a problem further exacerbated by poor infrastructure and an unproductive workforce in Gambia.

Kenya (KEN)

Kenya’s overall risk remains medium high. William Ruto is still president after his 2022 election, the next set of presidential elections are set for 2027. With many economic and social reforms providing more stability in recent years, Kenya is still battling against key issues such as poverty, climate change, high debt and violence. Political violence is high and legal & regulatory risk remains medium high. There is growing tension domestically against the government but also violence in the region continues to act as a threat for Kenya. For instance, in early February, members of al Shabaab, who have been fighting to overthrow the government in neighbouring Somalia, abducted five government officials in the northeast of the country. This is not the first time al Shabaab have launched attacks in Kenya as they pressure them to withdraw troops from Somalia. Kenya is also continuing to send troops to Haiti to support them in their fight against gang violence. In terms of the economy, real GDP is set to grow 5% in 2025 and 2026, according to the IMF. Growth will be supported by an agricultural sector recovery after droughts and increases in public sector funding as they push towards their Kenya 2030 vision of becoming a middle income country. President Ruto is building stronger ties with the UAE in his aim to secure financing to complete their regional railway projects. In addition, he is also finalising a USD1.5 billion commercial loan for budget support. Kenya have also benefitted from the IMF under their Extended Credit Facility (ECF) program since 2021 gaining USD3.6 billion worth of support and an EU Economic Partnership agreement since 2023. The risk of doing business remains medium high. Inflation also remains on a downward trajectory with 5.2% expected for 2025 and 5.1% for 2026. However, the big issue for the Kenyan economy remains high public debt, which the IMF forecast at 72.4% of GDP for 2025 and 71.9% of GDP for 2026. A significant issue for Kenya now is how they adapt to the new US administration’s decision to halt USAID. USAID to Kenya amounted to 0.5% of GDP and the withdrawal puts pressure on the government to cut spending elsewhere or raise taxes. Proposals to raise taxes were previously met with violent protests in Kenya and thus scrapped. However, the finance ministry has assured people that their budget deficit will narrow in 2025/26. Kenya have said they will stop issuing one-year Treasury bills to reduce their short term debts and to lengthen the maturities of their debt as 18.6% of their domestic debt is expected to mature by June 2025. The Kenyan Shilling has also stabilised slightly after record depreciation in 2023-24. Sovereign non-payment is medium high and exchange transfer medium. In addition, development will also continue to be halted by external crises such as climate change hitting agricultural through floods and droughts causing food insecurity as well as Kenya and the regions response to issues such as the Mpox outbreak in 2024. Supply chain disruption remains medium high.

Malawi (MWI)

Malawi’s overall risk remains medium high. Lazarus Chakwera of the Malawian Congress Party remains President of the country, continuing to lead his coalition government with 8 other political parties known together as the Tonse Alliance, ahead of elections set for September 2025. In June 2024, a new Vice-President, Michael Usi was appointed after Saulos Chilima lost his life in a plane crash. Political interference is at a medium high level and legal & regulatory risk is high. Corruption persists in government and 71% of the population live in extreme poverty, this reflects the frustration in Malawi with a difficult economic background highlighted by high inflation and public debt. The IMF estimate 4% real GDP growth in 2025 and 4.3% in 2026 supported by the agricultural sector and investments in the mining sector likely to boost export potential in the coming years. 2024 saw Malawi experience the consequences of the El Nino climate crisis as drought significantly disrupted harvests and therefore food security in the country. This put intense pressure on the current account deficit set to reach -13.8% of GDP in 2025 and -12% in 2026. Malawi have diminishing FX reserves to cover the deficit in their current account. The World Bank, told us as of August 2024, official reserves stood at 119.9 million USD covering just 0.5 months of imports at this time. In addition, Malawi is currently experiencing one of the highest budget deficits in Sub Saharan Africa expected at -5.6% of GDP in 2025 leaving gross government debt at 82.3% of GDP. Malawi are in need of debt relief, having only concluded a restructuring debt settlement with China, who they are becoming closer with and are Malawi’s main creditors. Sovereign non-payment risk is medium high. Enormous debt and a surge in food insecurity has left the IMF anticipating 15.3% inflation for 2025 while the country continues to feel the impacts of inflation reaching 30.6% in 2024. This negative macroeconomic backdrop along with political uncertainty ahead of the 2025 elections makes the risk of doing business high and emphasises the need for reform. The government have had to provide a recapitalization of the Reserve Bank of Malawi (RBM) after they made significant losses leading to a depreciation of the Malawian kwacha. The IMF’s Extended Credit Facility (ECF) programme are aiming to aid Malawi to rebuild FX reserves to allow for Malawi’s commitment of more exchange rate flexibility which is slowly taking effect. Exchange transfer risk remains high as a result.

Mali (MLI)

Mali’s overall risk level remains high. Political instability and conflict have divided Mali for many years which resulted in a 2021 military coup, resulting in Colonel Assimi Goita becoming head of the transitional Mali government. After 2021, Mali initially faced sanctions from their ECOWAS trade bloc which were later lifted, but now Mali have decided to withdraw from the bloc which has been approved alongside Burkina Faso and Niger with a 6-month grace period offered. The military junta are aiming to stabilise the country ahead of a path for democratic elections, a transition extended from 3 to 5 years in 2024. The suspension on political parties was lifted in July 2024 after a ban was imposed in April for security reasons. However, the constant insecurity from the presence of armed forces groups in the north of Mali poses a threat for Mali and its transition. In September 2024, there were terrorist attacks aimed at Bamako-Sénou Airport and the National Gendarmerie School, with claimed responsibility by an Al-Qaeda linked group. Conflict from jihadist groups in recent times has now led to the cooperation of Mali with military-led neighbours Niger and Burkina Faso in deploying 5,000 troops in the Sahel region. Poor infrastructure and high legal & regulatory risk make the risk of doing business medium high. In terms of the economy, the IMF forecast 4.4% growth in 2025 and 4.9% in 2026. Resilience in the mining sector will help support growth, particularly after Canadian mining company, B2 announced in January that it will invest 10 million USD in exploring the Fekola gold complex in Mali, after reaching a settlement with the Mali government over their mining code which seeks to give the government more mining revenue and has caused the arrests of 4 employees from Barrick Gold for financial crimes and not following the code. In addition, inflation is expected to continue coming back down to 2% in 2025 and 2026 and is expected to reduce the relative and absolute poverty rate in tackling the cost of living. Government debt to GDP has risen in recent years due to the need to deal with security issues and economic shocks, the IMF forecast debt to reach 55.9% of GDP in 2025. The inability of the government to provide fiscal stimulus is high and sovereign non-payment risk is medium-high. The current account deficit will likely be reduced in the next couple of years with the IMF estimating -3.5% of GDP in 2025 and -3% of GDP in 2026. Mali do continue to use the West Africa CFA Franc, which is pegged to the EUR. Banking sector vulnerability is medium and exchange transfer risk is medium high.

Mozambique (MOZ)

Mozambique’s overall risk remains high. October 2024’s elections, filled with controversy, saw the ruling Frelimo party retain its power over Mozambique and Daniel Chapo take over Filipe Nyusi as President after President Nyusi had completed his two terms. Daniel Chapo and the Frelimo party won 71% of the vote, but as a result there were accusations of a rigged election and the killings of opposition supporters, causing violent protests. Opposition leader Mondlane fled Mozambique due to the assassination of two of his aides. The security situation has been fragile since 2017, when there was an insurgency of jihadist groups into the gas-rich north part of the country. It has particularly worsened since 2023 and in 2024 the town of Macomia came under siege, killing many, displacing many more and halting progress in Mozambique utilising these resources. Mozambique have had to call upon Rwanda to help their army in the Cabo Delgado region. Political violence is very high and legal & regulatory risk is high. The IMF forecast 4.3% growth in 2025 and 3.9%, growth still not reaching pre-COVID levels. Growth will be supported by LNG production on the Coral South offshore facility and growth in the agricultural sector. In terms of inflation, despite coming down from 2022’s 10.4% peak, inflation remain elevated with 4.3% forecast for 2025. Extremely high levels of government debt is similarly on a downward trajectory with 96.5% of GDP for 2025 is expected to fall to 93.8% in 2026. This comes after last year, Mozambique partially resolved the ongoing ‘tuna bond’ scandal. Mozambique have managed to regain more than 825 million USD of 2 billion USD worth of fraudulent loans, which wrecked public finances and ultimately led to default in 2016 and the collapse of its currency. Sovereign non-payment risk is high, along with the inability of the government to provide fiscal stimulus. Alongside the downside risks of the security situation, high debt and inflation, Mozambique is also dealing with the impacts of climate change. Extreme weather and the effect of the El Nino crisis on food security for one of the poorest countries in Africa continues to hold back development. The risk of doing business remains high. Mozambique is however benefitting from the IMF’s Extended Credit Facility (ECF) Program since 2022 up to 456 million USD.

Niger (NER)

Niger’s overall risk remains high. Since 2023’s military coup, General Abdourahamane Tchiani and the National Council for the Safeguard of the Homeland lead the military junta ruling over Niger. Political violence and legal & regulatory risk are both high with the ruling junta yet to announce any progress of transition to elections or a clear constitutional arrangement. Violence continues to disrupt Niger; Niger have suffered terrors attacks from jihadist groups particularly on the border with Burkina Faso. Furthermore, groups such as the Front Patriotique de Libération and the Front Patriotique pour la Justice have worsened the security situation launching attacks against the military in calling for the release of the previous deposed President. In addition, Niger, alongside neighbours Burkina Faso and Mali, have withdrawn from the Economic Community of States of the Sahel (ECOWAS) leading to the formation of the Confederation of States of the Sahel (AES). In terms of the economy, growth is expected to pick up in 2025 forecast to reach 7.3% according to the IMF. Last year saw the ECOWAS bloc drop sanctions on Niger, previously imposed in light of 2023’s military coup. Moreover, growth will be supported by boosts in oil production, agricultural growth and continued strength in producing uranium. Oil and mineral exports will boost income and fiscal revenues in Niger. High inflation, particularly in food prices, in recent years has meant those in extreme poverty in Niger remains high and now over 13% of the population are said to be facing food security, causing the displacement of many. The climate crisis in Niger is another extremely alarming issue as they are one of the most vulnerable countries to its impacts. Large amounts of flooding emphasised this in 2024, adding significant pressure to the agricultural sectors in the Sahel region. Supply chain disruption is thus at a medium high level. In order to make steps to deal with this problem, Niger have managed to be secure more external financing and support from the international community. For example, to help deal with high debt arrears halting bond issuance, China offered Niger a 400 million USD loan secured by oil exports. Niger is resuming issuing debt regionally at rates over 9% for 12-month bills. Due to this and strong growth, the IMF therefore estimate a small fall to government debt from 51.7% of GDP in 2024 to 49% of GDP in 2025. Sovereign non-payment risk is medium-high and exchange transfer high. Despite withdrawing from the ECOWAS, Niger continues to use the West African CFA Franc, pegged to the EUR. However, the impact of leaving the bloc on trade prospects inside and outside the Sahel region are yet to be made clear. The risk of doing business in Niger currently remains high.

Senegal (SEN)

Senegal’s overall risk remains at medium high. Bassirou Diomaye Faye remains President after his election win in March 2024. The end of 2024 saw parliamentary elections result in 130 seats and a strong majority for the President’s Pastef party, now giving him enormous power to put forward his agenda. Political interference remains medium high and legal & regulatory risk medium as Senegal remain one of the most stable countries in the Sub-Sahara region. President Faye’s priorities lay in the review and reform of oil and gas contracts and resetting foreign relations, for example with former colonial power France. Another key issue Faye’s new government are trying to get grips of is the surge in emigration of Senegalese people into Europe, a project that the EU have provided 30 million EUR to support - 39 people were killed in a shipwreck off the Senegalese coast in September. The economy is looking strong coming into 2025, the IMF forecast 9.3% growth this year. Hydrocarbon production is expected to be a major boost to growth with oil and gas projects headed by the likes of Woodside’s Sangomar, BP and Kosmos Energy’s Great Tortue Ahmeyim (GTA). Sangomar’s project aims at producing 100,000 barrels of oil per day and is expected to contribute over USD 1 billion to the economy each year. Senegal have additionally set a path to diversifying and developing their economy into new sector such as tech, tourism alongside energy in their ‘Senegal 2035’ and ‘Senegal 2050’ strategies. The risk of doing business remains medium high. The stable inflation backdrop is also boosting confidence in the economy with the IMF projecting 2% for 2025 and 2026. However, a high level of government debt is an obstacle to the country’s ambitious development strategy. 80.5% debt to GDP is expected for 2025 and 81% for 2026. Meanwhile, the current account deficit is projected at -8.3% of GDP for 2025 and -5.9% for 2026. These large imbalances are anticipated to improve with the pickup in oil and gas production boosting export led growth and government revenue. However, this makes the sovereign non-payment risk and the inability of the government to provide fiscal stimulus high. The agricultural sector also remains an extremely prominent part of the economy, this coming with the downside risks as the climate crisis worsens in western Africa. Senegal’s World Bank Country Climate and Development Report stated that the impacts of climate change could bring more than 2 million Senegalese people into poverty by the middle of the century. This is seen as a huge development hurdle alongside low productivity and economic imbalances. Senegal is benefitting from a 3-year USD 1.8 billion IMF package to stabilise the macro economy and allow the new administration to implement new reforms. Senegal do continue to adopt the CFA Franc (pegged to the EUR) as their currency, with the central bank (BCEAO) having yet to begin easing the policy rate after aggressive hikes in recent years. President Faye has hinted at reforming CFA Franc policy and if not breaking away from the group in forming their own currency. Exchange transfer risk remains medium high.

South Africa (ZAF)

South Africa’s overall risk score remains at medium, with no changes in any of risk levels in this reporting period. First, the risk of political violence stood at high due to high income inequality, poverty and corruption. Structural risks such as high unemployment and logistics bottlenecks remain strong although power supply constraints considerably eased following mid-2024. After the ruling African National Congress (ANC) lost its majority in the general and presidential elections in 2024, and ANC and Democratic Alliance (DA) formed a coalition government of national unity (GNU), the political interference risk is at medium-high rating due to some political frictions. Despite political analysts regarding the coalition relatively successful, the coalition got recently tested by the education bill and national health insurance, which ignited legal and regulatory risks to remain at medium level. On the economic front, despite problems such as declining real per capita growth, rising level of public debt and high unemployment remain significant; the macroeconomic outlook continues to improve. December CPI reading (3.0% YoY) was below the mid-point of target of 4.5% and power cuts (loadshedding) remains suspended for 323 days as of February 21. The ease of doing business, which remains at medium-high, is helped by the suspended power cuts, moderate inflation and improving economic environment. The monetary easing cycle continues with pace, as South African Reserve Bank (SARB) cut the key rate to 7.5% on January 30 which will likely bolster growth in private-sector credit uptake. Capital buffers are sound, enabling banks to withstand shocks as banking sector vulnerability remains at medium-low, demonstrating the relative strength of the financial sector as domestic fiscal outlook is moderately stable. The economic outlook is positive on the back of improved investor sentiment, sustained electricity generation, and falling inflation.

South Sudan (SDN)

South Sudan’s overall risk remains very high with Salva Kiir Mayaridt remaining as president since 2011’s independence from (North) Sudan. Elections were set to be held in December as part of their 2018 peace plan agreement, however the president has pushed back the transition by another two years. A move which has caused much disappointment internationally and particularly amongst the guarantors of the peace process such as the UK, US, EU and Canada. However, tensions between rival communities persist as the government claim they weren’t ready for election in the fear of escalation. Political violence and legal & regulatory risk both remain very high. For instance, January saw riots which killed 16 Sudanese people over the alleged killing of South Sudanese people in the El Gezira region by the Sudanese military and allied groups from North Sudan. This led to the imposition of a temporary police curfew and social media ban. This reflects the spill over effects from the conflict over the border. The economy remains dependent on oil production. After a -26.4% real GDP decline in 2024, the economy is expected to bounce back with the IMF forecasting 27.2% growth in 2025 and 25% in 2026. For example, in January, Sudan lifted a nearly yearlong ban to now allow South Sudan to transport its oil to a Red Sea port due to security reasons and now the repair to a key pipeline which was damaged due to civil war in Sudan. Spill overs from the inability to export oil to international markets through the Red Sea and the humanitarian crisis in Sudan alongside the climate crisis such as flooding and drought risks continue to impact South Sudan. Unicef rank South Sudan as number 7 in the world in young people’s exposure to the impacts of climate change and environmental shocks. Floods are particularly affecting a number of communities, causing at least half affected to flee their homes. In addition, the damage to agriculture is worsening the issue of food security, disease outbreaks and education. Supply chain disruption is thus very high. Additionally, 79.3% inflation is projected the IMF and a plummeting South Sudanese Pound with record low foreign exchange reserves, coincides with the President’s decision to fire the central bank governor in December, reflecting the instability and uncertainty in the monetary sector. Exchange transfer risk is thus very high. High government debt of 50.3% of the economy this year makes the inability of the government to provide fiscal stimulus very high with high debt servicing costs. However, with greater oil exports expected now they can access the Red Sea port in Sudan, more resilience is expected with the IMF anticipating current account surpluses and falling debt in the coming years. However, much depends on the progress in the conflict in Sudan, greater political stability, the response to climate effects and the availability of aid. The risk of doing business remains very high.

Sudan (SDN)

Sudan’s overall risk remains very high. Civil war persists between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) as it has done since April 2023. Political violence and political interference are both very high. The Sudanese army are close to recapturing Khartoum after getting back on top in the conflict having driven out the RSF after suffering loss of control in the south and west of the country. Abdel Fattah al-Burhan continues to lead to the Sudanese Armed Forces as they look to re-establish their foothold in the capital and the surrounding areas and set up a new temporary administration, however the country remains completely divided between the two sides. In the meantime, the RSF have signed a political charter breaking away and forming their own government with political allies a move that has been heavily rejected by the likes of Egypt who support the SAF. Sudanese firms and the RSF have been heavily sanctioned by the US as the US accuse the RSF of genocide, without supporting the SAF. The UAE have been accused of supporting the RSF and supplying them with arms. In addition, Russia have signed a deal with Sudan over a Red Sea naval base in Port Sudan where the SAF operate as Russia look to expand in the area and gain more strength in the Red Sea, particularly off the back of the fall of the Assad regime in Syria. Overall, the conflict continues to devastate the country, causing a humanitarian crisis killing thousands, displacing 10 million and 25 million Sudanese people are in acute hunger. The risk of doing business is thus very high. The economy has been destroyed by war, it suffered -20.3% growth in 2024 and the IMF estimate some level of a bounce back at 8.3% in 2025 with a hope that we are getting closer to some progress on the war. Oil production and agriculture in which the economy relies on has been halted. Thus, 118.9% inflation is projected by the IMF for 2025 and 23.4% for 2026. In addition, government debt to GDP is at extortionate levels of 237.1% of GDP for 2025 and 184.7% for 2026. The average projected level of government debt for the Sub-Saharan region is 61.3% of GDP for 2025, thus without significant aid or debt relief debt levels will be completely unsustainable for Sudan. Due to the violence, aid and goods are having difficulties moving in and out of the country with the SAF controlling the Port Sudan Red Sea trade route and the RSF controlling the roads through Chad and Libya. Sovereign non-payment and exchange transfer risk are very high. However, ultimately Sudan’s outlook depends on the progress of the conflict and the resistance of the RSF to SAF advances. There have been efforts made by the likes of Egypt, the US, Saudi Arabia and Turkey to pave the way for some form of peace talks however the situation remains extremely uncertain. 

Tanzania (TZA)

Tanzania’s overall risk remains medium high. Samia Suluhu Hassan remains president ahead of this year’s presidential and legislative elections set for October. Political interference remains high and legal & regulatory risk medium high. Samia Suluhu Hassan is expected to win the upcoming election extending her rule to 2030 as she has made efforts to improve transparency and the relaxation of repression on opposition parties, giving opposition parties the right to rally again, compared to her predecessor President Magufuli. However, September 2024 saw the killing of a senior member of the Tanzania opposition, drawing some doubt and raising questions over the President’s progress. According to the IMF, 6% growth is expected for 2025 and 6.3% for 2026. Through their 5-year development plan, particularly sectors are being targeted to bring about strong growth in the economy. For instance, Tanzania has significant gas reserves to exploit. Tanzania is currently in discussions with investors over the construction of a planned USD42 billion natural gas plant to unlock 47.13 trillion cubic feet of natural gas deposits. In addition, boosts to tourism is set to be another key growth supporter in the coming years. Boosts in gas revenues, tax collection improvements, gold exports and less reliance on energy imports makes the IMF anticipate falling imbalances with government debt expected to fall from 46.3% of GDP in 2025 to 45% of GDP in 2026 and the current account deficit to fall from -3.4% of GDP in 2025 to -3.2% of GDP in 2026. Thus, the inability of the government to provide fiscal stimulus and exchange transfer are both at a medium level. Inflation though is anticipated to increase into 2025 to 4% still below the 5% target, however the central bank is keeping the policy rate at 6%. In addition, poverty and social inequality as well as climate risks remain an issue in Tanzania reflecting poor productivity. However, an IMF agreement giving Tanzania USD265.8 million this year is aimed at promoting sustainable and inclusive growth. With greater exchange rate flexibility, the Tanzanian shilling has depreciated but at a more stable rate now compared to the 18 months previous. The risk of doing business does remain very high, however there’s a hope that things are moving slowly in a more positive direction with greater economic ties with partners such as China, India and the UAE expected to further stimulate investment and financial support.  

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