Africa: Country Risk Ratings
We provide country risk reviews for 10 countries in Africa.
Angola
Angola’s overall risk has decreased to a medium high level. In 2022 Lourenco was re-elected, after the previous presidency of Jose dos Santos that had lasted 38 years up to 2017. The new government has tried to increase investment from abroad through various policies, such as fiscal consolidation. Even so, political violence is still at medium high, due to the high levels of crime in the country. Human rights seems to be an issue that has not been well treated, by the authorities, who have reportedly killed peaceful protestors that demanded better public services. We have also had recent protests against fuel duty subsidy being reduced significantly. Legal and regulatory and the risk of doing business also remains at a very high level, while political interference remains at high level. Dealing with construction permits, getting electricity, and registering a property are procedures that require ample time and capital and make it very challenging to start a business. Inflation levels in Angola continue to be very high, with CPI currently at 21.4%. However, CPI is projected to slow to 13.1% in 2023 by the IMF. Inflation is a very important issue in Angola and for now the inflation differentials are too large to encourage the central bank to slow the pace of the Angolan Kwanza decline. Angola depends highly on oil, which is around 37% of the GDP, but also 90% of the country’s exports. The government debt of Angola is projected to be 67.9% of GDP in 2025, after reaching a peak of 138.9% in 2020. The inability of the government to provide (fiscal) stimulus at a medium risk rating and sovereign non-payment are at medium high rating, given this less challenging debt outlook. Banking sector vulnerability is at a medium low level. The banking assets as GDP share add up to 60.2%. Angola seems to lack financial inclusion however, as over 50% of the population do not have a bank account, despite the opening of new bank branches.
Congo Dem. Republic
Congo’s Democratic Republic overall risk remains very high. In 2019, Felix Tshisekedi was elected as president of the Democratic Republic of the Congo. Political violence remains very high, with many protests from civilians, such as the anti-UN protest. Moreover, the existence of M23, an armed rebel group, has led to greater levels of violence in Congo DRC.Legal & regulatory risk also remains very high and the risk of doing business remains high. Local authorities are often accused of committing human rights violations, such as summary executions, looting and even rape. Human rights remain a big issue in Congo DRC, as more than 64% of the population lived with under 2.15 USD a day, but also about 600,000 people were forced to leave their homes. Supply chain disruption and political interference remain very high. Felix Tshisekedi and his party have not managed to fully stabilize inflation. In 2023 CPI was 19.3%, and is forecasted to decrease to 10.6% in 2024, according to the IMF. The current account balance, as a percent of GDP, has also been high though stable, and was measured as -5.2% of GDP in 2022, and is expected to increase to -6.0% in 2023. Congo highly depends on the production of oil and the mining of copper and cobalt. These are the industries that account for most of the exports of Congo DRC. Foreign direct investment has also been increasing lately, but this has more to do with long-term bullishness to copper than the risk rating of the country. Sovereign non-payment thus remains medium high, whilst exchange transfer remains medium.Lastly, the inability of government to provide fiscal stimulus remains medium.
Congo’s overall risk level remains high. Denis Sasssou Nguesso remains the president of Congo, after being re-elected in 2021. Three parties have decided to form an alliance, believing that this way they will have greater chances in the 2026 elections. Political violence remains high and political interference and legal & regulatory risk remains very high. After the elections in 2022, many opposition supporters believed that the results were rigged and accused the wining party of fraud. Abuses by security forces occur at a significant rate in the country, but are rarely investigated. The country is also rumoured to have very high levels of corruption and inequality. Respiratory diseases, such as malaria, tuberculosis, and internal parasites are very common in the country and the control of these is certainly challenging, due to the pollution and the low levels of sanitation of water. Supply chain disruption also remains high. Economic growth in 2022, was reported to be 1.7% and is forecasted to increase up to 4.0% in 2023 according to the IMF.Congo is highly depends on oil production and has decided to also invest in other industries, to increase the levels of economic diversification in the country. CPI is forecasted to increase to 3.5% in 2023, according to the IMF. Sovereign non-payment remains high and exchange transfer remains medium high, but is capped by a good external situation. The current account surplus is projected to be 4.0% in 2023 and in 2024 decline to 2.1% of GDP, according to the IMF. The currency of the country is the CFA franc, which operates under a fixed exchange rate towards the euro and has been considered to be dictated by the European Central Bank and not reflecting inflation differentials.. The risk of doing business remains very high, as low electricity coverage, high levels of corruption and poor infrastructure are challenges that businesses must face in the Republic of Congo. The inability of government to provide fiscal stimulus remains high.
Mali
Mali’s overall risk level remains high. The current interim president Assimi Goïta, became president after the coup d’état in 2021 and the abduction of the previous president Bah N’Daou forcing him to resign. Current Prime Minister Choguel Maïga was appointed by Goïta after the coup. The elections that were supposed to take place in February 2022, will be held in March 2024 as part of the transition to a civilian government. Political violence thus remains very high, while legal regulatory and political interference risks remains high. More than 30,000 people have also been displaced to Ménaka, due to the dispute between Islamic State in the Greater Sahara and Jama’at Nasr al-Islam wal Muslimin. A protest also occurred to criticize the peacekeeping mission by the United Nations, arguing that such UN support is no longer required. Supply chain disruption also remains very high. Mali’s economic growth is projected to remain healthy at 4.5% in 2023, while inflation is coming back under control after the 2022 food price shock. 2024 is projected CPI at 2.8% by the IMF. The current account balance remains large in 2022 at -6.9% of GDP, and is forecasted to continue to remain wide due to currency overvaluation The currency of the country is the CFA franc, which operates under a fixed exchange rate towards the euro and has been considered to be dictated by the European Central Bank and not reflecting inflation differentials. Sovereign non-payment thus remains high and exchange transfer remains medium high. The risk of doing business remains medium high, as businesses in Mali have to face various challenges, such as access to electricity, infrastructure and corruption. Lastly, the inability of government to provide fiscal stimulus remains high.
Mozambique
Mozambique’s overall risk level remains high. Filipe Nyusi has remained president of the country since 2015, after being re-elected in 2019. Political violence remains very high, with legal & regulatory risk also remaining high. An Islamist insurgency, known as al-Shabab, has been organising terrorist attacks in the Cabo Delgado province, since October 2017, killing more than 4,500 and displacing more than one million. Cabo Delgado is a province in the northern part of the country very rich in resources, such as gold, gas and rubies and many believed that the profits from these resources were going to an elite in the ruling party. The group became a big threat to the country forcing Nyusi to invite military support from other African countries, mainly Rwanda. The EU has also decided to provide training to about 1,600 soldiers, to allow Cabo Delgado to become a more secure location. Supply chain distribution thus remains very high, while political interference and the risk of doing business remains at a high rating. Despite all of these political headwinds Mozambique GDP growth is projected to rise a strong 7.0% in 2023 helped by demographic factors and the low level of GDP per capita (in 2023, 62% of the population still lived under extreme poverty). Inflation has become an issue in the country in 2022, with a CPI equal to 9.8%, compared to a 3.1% in 2020. CPI is expected to decrease in the coming years, with a forecast of 6.5% in 2024, according to the IMF. One of the biggest challenges that Mozambique faces and will continue to face is the current account deficit, equal to -32.9% of GDP in 2022, compared to -22.4% in 2021. Mozambique has not managed to stabilise the current account deficit at sustainable levels, and is not forecasted to do so in the following years, with a forecast for 2024 of -39.3% of GDP. Sovereign non-payment declined from very high to high (due to lower government debt/GDP), but exchange transfer remains high due to the external situation. Lastly, the inability of the government to provide fiscal stimulus has decreased from very high to high, as government debt/GDP has declined from 120% though is still projected at 89.7% of GDP in 2023.
Nigeria
Nigeria has a very high overall risk. The elections, held in February 2023, saw President Bola Tinubu emerge victorious, representing the All Progressives Congress Party. Although the overall process was deemed peaceful and effective, there were isolated incidents of violence. Additionally, allegations of voter suppression and vote buying were reported. The election results faced opposition disputes , citing irregularities in the vote count and failure to inform results in real time. Despite the challenge, the court dismissed the opposition's claims. During his initial days in office, President Tinubu implemented measures that generated enthusiasm among investors. Firstly, he ended a longstanding fuel subsidy. He later emphasized that this move had saved the government USD 1.32 billion within two months. Secondly, he replaced Nigeria’s Central Bank governor and relaxed foreign exchange controls, resulting in the devaluation of the naira from overvalued levels. However, the favorable effects of these actions were short-lived. The removal of the subsidy caused a rapid increase in inflation, prompting a series of strikes. Furthermore, as protests escalated, President Tinubu announced a six-month increase in the minimum wage and introduced an aid package to support households adversely impacted by the economic reforms. Notably, Nigeria faces a very high risk of political violence. President Tinubu has initiated efforts to position Nigeria as a nation welcoming foreign investment on various international platforms. However, there is an ongoing need for him to advocate for specific policies that enhance the overall business environment. In particular, corruption remains a significant concern, posing the risk of bribery practices for companies. A recent example is the charge brought against Nigeria’s former oil minister in August 2023. The charge stemmed from her admission of accepting bribes in exchange for oil and gas contracts during her tenure in the government. Consequently, legal and regulatory matters are high risks. Furthermore, companies face additional challenges, including frequent power outage, port congestion, lack of infrastructure, bureaucratic and burdensome custom procedures, and exposure to natural disasters. As a result, supply chain disruption is a very high risk. Aside from institutional and supply chain-related challenges, a significant obstacle reported by most companies is the difficulty in obtaining foreign currency to operate effectively in Nigeria. All factors considered, the risk associated with doing business in the country is very high. In terms of economic developments, the IMF expects Nigeria’s economy to grow 2.9% in 2023 and 3.1% in 2024. Similarly, the World Bank projects that the country’s economic growth will be driven by a recovery in the agricultural and sector services, alongside increased government spending. For example, President Tinubu aims to increase investment in road, rail, and port infrastructure. Additionally, he plans to change the tax system to increase the burden towards wealthier citizens while reducing corporate taxes. Hence, the government’s inability to provide stimulus is a medium risk. Finally, the Fund foresees Nigeria’s general government gross debt to increase to 38.8% in 2023 and further to 41.3% in 2024, a notable increase from 27.7% in 2018. Moreover, Bloomberg reported that in 2022, 96% of the country’s revenue was spent on servicing its debt, which makes sovereign non-payment a medium high risk.
Sierra Leone
Sierra Leone’s overall risk level remains high. Julius Maada Bio, the leader of “Sierra Leone People’s Party” will continue to be the president of the country after being re-elected in the 2023 elections. Political violence remains a medium, political interference remains at a medium high rating and legal & regulatory risk at a high rating. The judicial system is an area that the government will have to improve, as there have been reported, judicial corruption and poor judge salaries, but also the lack of resources and the shortage of lawyers lead to lack of access to legal counsel. Local authorities have been reportedly involved in violent activities, in which they are rarely held accountable.A critical issue that Sierra Leone has been suffering from is inflation, with a CPI of 27.2% in 2022 and inflation is expected to increase at even higher rate in 2023, to 42.9%, according to the IMF. The central bank of Sierra Leone continues to increase the interest rates, as of October 2023, with interest rates currently equal to 21.25% but not enough is being done. Economic growth is forecasted to slow to +2.7% in 2023 as the fight against inflation restrains growth. The current account deficit is forecasted to be -6.8% in 2023, a decrease of 2% compared to 2022 but still wide. The domestic currency, the Sierra Leonean Leone, had only fallen by 4.4% versus the USD this year despite the wide inflation differential and a major devaluation risks exists. Sovereign non-payment thus remains high, with exchange transfer at a medium high. The risk of doing business remains high, as businesses in the country constantly face the challenges of poor infrastructure and corruption. The inability of the government to provide stimulus has increased from high to very high.
Senegal
Senegal’s overall risk level remains medium high. Macky Sall has been the president of the country since April 2012. However, he has declared that he will not run for a third term. Political violence in the country and legal & regulatory risk remain medium, while political interference remains medium high. Ousmane Sonko, the leader of the Patriots of Senegal (PASTEF) party and widely supported by young people was arrested by the local authorities, for allegedly raping a young woman. Many protests have occurred following the arrest of Sonko, some of them deadly. Senegal’s interior ministry has dissolved the political party of Ousmane Sonko, for rallying supporters into stoking unrest. Sonko argues that he is not guilty of the charges and that this is an effort from the current president to suppress him. Supply chain disruption also remains a medium risk rating. On the economic front, Senegal is projected to see good 4.1% growth in 2023, while depending highly on the production of oil and gas. In terms of inflation, CPI should continue to be brought under control, with the IMF forecasting a decrease to 3.3% by 2024. Public debt remains high however at 76% of GDP in 2022. The inability of government to provide fiscal stimulus thus remain medium high.The current account deficit has also been declining significantly after the 2022 food price crisis and is projected to be a still high 7.9% of GDP in 2024 according to the IMF. This all means that sovereign non-payment and exchange transfer remain medium high.
South Africa
South Africa’s overall risk score is at medium, while the risk of political violence remains high mostly due to long-term income inequality and poverty, in advance of approaching 2024 general election (scheduled between May and August, 2024).Opinion polls suggest that the ANC will likely have less than 50% of the vote in the 2024 election and will likely need to form a coalition with the Democratic Alliance or other small parties. A small ANC majority or coalition government could slow decision making on dealing with the power cuts, while a surprise healthy ANC victory could allow the ANC to continue to reduce power cuts and the lower the adverse growth and inflation impacts. It is worth mentioning that the risk of political violence also remains high, as the left wing Economic Freedom Fighters agitate for radical change. The accelerated pace of electricity shutdowns (load shedding), particularly during August and September this year coupled with logistic and transport crisis are likely to keep social tensions high. On the inflation front, prices started to slightly pick-up again as of August ignited by strengthened load shedding, global oil prices hiking and the South Africa Rand losing value. The pressure to the Rand remains high due to shrinking trade surplus, China slowdown and inflation expectations. The ease of doing business, which remains at medium-high, will not be helped by the election, as the government will likely be weak and unable to accelerate the reform process or quickly fix the electricity problem in the country.Another major economic issue to be solved is putting the government debt/GDP ratio onto a downward path, but this will have to wait until after the 2024 election. Apart from the economic front, legal and regulatory risks remain at medium.
Tanzania
Tanzania’s overall risk rating remains at medium high. The president, Samia Suluhu Hassan and her party have not managed to decrease the level of corruption in the country since being appointed in 2021. The level of political interference is considered to be at a high level, with political violence and legal & regulatory risk at a medium high rating. Lately, the government of Tanzania, by borrowing, but at the same time being debt sustainable has tried to restore and improve the levels of corruption and economic inequality. Tanzania has managed to have a stable current account balance throughout the years, while the forecast suggests that until 2028 it will have managed to decrease the deficit to -2.7%. Sovereign non-payment experienced an increase from medium to medium high, due to the increase in the amount borrowed by the government to invest in projects, which they hope will attract investors. They believe that these projects will generate lucrative returns for Tanzania in the near future. Tanzania has managed to stabilize inflation and is expected to continue to do so with the 2024 CPI forecast at 4.0% by the IMF. The risk of doing business in the country is very high, due to the lack of up to date infrastructure and technology. These factors cannot illustrate Tanzania as an attractive location to invest, by foreign companies at the moment. Exchange transfer and the inability of the government to provide stimulus remains at a medium level, whilst banking sector vulnerability is at a medium low. To sum up, Tanzania’s plan is to invest in projects by borrowing, which will increase Tanzania’s returns in the near future, while inflation and current account balance are stable.