Sub Sahara Africa: Country Risk Ratings

Burkina Faso (BFA)
Burkina Faso’s overall risk level remains high. Ibrahim Traore gained power and became president of the country after a military coup, become the world’s youngest head of state. Political violence and legal & regulatory risk remain very high, as political interference remains high. The levels of violence are very high, due to the constant battles between armed groups, the army and pro-government militias which has led to thousands of deaths and over 2 million displacements. Traore has set a goal to recapture 40% of the country’s territory, which is reported to be controlled by Jihadists. Many incidents have occurred lately in Burkina Faso like the one that took place in the northern part of the country in late November, when an Islamist Jihadist militant group killed 40 civilians during an attack. Supply chain disruption has increased from high to very high. Burkina Faso is expected to see an increase in growth in 2023 reaching 4.4% and 6.4% in 2024. CPI is forecasted to experience a significant decrease in 2023 to 1.4%, after reaching the highest CPI of 14.1% in 2022 since 1995, according to the IMF. However, inflation is expected to increase to 3% in 2024. The central bank of Burkina Faso has steadily increased the interest rate from 4% to 5.25% over the past 12 months, applying a contractionary monetary policy to reduce inflation. The current account deficit is expected to decline to -5.1% in 2023 and slight rise in 2024 to -5.2%. Sovereign non-payment has increased from medium high to high, as exchange transfer remains medium high. The currency utilised domestically is the West African Franc, a currency pegged to the euro. The risk of doing business has risen from medium high to high, as terrorism and corruption continues to exist at great levels. Banking sector vulnerability remains medium low, with the inability of government to provide fiscal stimulus at a high rating. 

Cameroon (CMR)
Cameroon is assessed with a medium-high overall risk, primarily driven by an uncertain political landscape marked by President Paul Biya, who, at 90 years old, is concluding his term by October 2025. Biya, in office since 1982, faces scrutiny over his ability to complete his term, and there are reservations about his potential reelection, considering the seven-year presidential term. The opposition, led by Maurice Kamto through the Political Alliance for Change (PAC), adds pressure, making the political violence a high risk. Criticism is directed at the government for its lack of transparency in its legal and regulatory systems, which is deemed as a very high risk. More specifically, corruption, nepotism, and bribery, mostly in the judiciary, public services, and customs, are often cited as an impediment to doing business in the country. Additionally, the government's track record of expropriating large infrastructure projects contributes to a high political interference risk. Supply chain risks are cataloged as very high due to inefficient transport infrastructure, including congestion at ports and a lack of regional rail, along with security concerns related to carjackings and violence from anglophone rebels. Despite the highlighted challenges, Cameroon has experienced a slight improvement in the risk of doing business, transitioning from very high to high. We think efforts to foster a business-friendly environment, encourage public-private partnerships, and introduce tax incentive programs contribute to this positive shift. From an economic standpoint, the IMF projects Cameroon's growth at 4.2% in 2024 and 4.4% in 2025, supported by a relatively diversified economy in the secondary and tertiary sectors and benefited from the implementation of policies based on the current National Development Strategy (NDS30). The Fund sees the general government gross debt (as % of GDP) to decrease from 39.6% in 2024 to 37.2% in 2025, attributed to improved debt management and economic reforms. However, historical data reveals a doubling of Cameroon's debt in 2024 compared to 2014. Challenges persist, including liquidity pressures due to high spending needs, particularly in the upcoming electoral year, and delayed payments in external debt during 2023, resulting in a medium-high sovereign non-payment risk. The 2024 budget proposes a 0.2% increase, focusing on job creation, poverty alleviation, and defense, with a medium risk associated with the government's ability to provide stimulus.

Central African Republic (CAF)
Central African Republic’s overall risk level remains very high. Faustin-Archange Touadéra remains president of the country, with Félix Moloua as prime minister. Political violence, political interference and legal & regulatory risk remain very high. CAR continues to be a very corrupt country, a situation which has not managed to be resolved. A new referendum was voted by 95%, which allows the president to be elected unlimited times, the presidential term has increased from 5 years to 7 years and there will also be an office for a vice president. This referendum was boycotted by opposition parties, who claimed that this law was designed to keep Touadéra president for life. Many Wagner Group militants from Russia have also been helping CAR to fight rebel groups, since 2018. The future of Wagner Group militants in CAR is uncertain after Prigozhin was presumed dead. A recent report suggests that Russia laundered USD2.5 bln, with Wagner’s group illegal gold trading generating over 100 million USD per month for the Kremlin. Joe Biden announced in October 2023 that he was planning to remove CAR from the African Growth and Opportunity Act (AGOA), due to constant human rights violations and no democratic progress. Supply chain disruption remains very high. CAR is expected to report a growth of 1% in 2023 and 2.5% in 2024, according to the IMF. CPI is forecast to be higher in 2023 equal to 6.5% in 2023 and then drop to 3.2% in 2024. The Bank of Central African countries, has increased the key interest rate to 5%, due to recent inflationary pressures. Sovereign non-payment remains high with exchange transfer at a medium high. The currency used in CAR is the CFA franc, which is pegged to the Euro. The risk of doing business remains very high, due to the level of corruption, but also due to the high levels of violence in the country, as banking sector vulnerability remains medium low.

Chad (TCD)
Chad’s overall risk level remains very high. Mahamat Deby is currently the head of state after the death of his father, Idris Deby, who was president for over 30 years. Mahamat Deby acquired power in a military coup in 2021. Political violence, political interference, as well as legal & regulatory risk remain very high, with corruption remaining at high levels in the country. The authorities have decided to grant amnesty to the security forces that are responsible for the death of at least 50 opposition protestors, that were against Mahamat Deby extending his rule, an event that has been characterised as “Black Thursday”. Deby has also hired as the country’s prime minister a long-time opponent Succes Macra who has decided to give out his salary to help others in the country. Supply chain disruption remains high. Growth is projected to rise to 4% in 2023 and a reasonable 3.7% in 2024 . CPI is forecast to reach 7% in 2023 and then decrease to 3.5% in 2024, according to the IMF. The Bank of Central African States has increased the key interest rate by 0.5% in the past 12 months from 4.5% to 5%. The current account surplus is forecast to decline to 0.2% in 2023 and become a deficit by 2024 of -3.3%. Sovereign non-payment remains medium high, with exchange transfer at a high rating. The currency utilised in Chad is the Central CFA franc, which is pegged to the euro, at a rate of 1 euro for 655.957 CFA franc. The risk of doing business remains very high, due to the high levels of corruption and violence, with the banking sector vulnerability increasing from medium low to medium.

Cote d’Ivoire (CIV)
Ivory Coast’s overall risk falls from high to medium high. This is due to political violence and sovereign non-payment rating decreasing from high to medium high.  Alasane Ouattara has remained the president of the country since 2011, which has helped.  Even so, on the 6th of October the president announced the removal of Prime Minister Patrick Achi and his cabinet, without any explanation, and then appointed Robert Beugre Mamba as PM. Former Ivory Coast prime minister and self-exiled Guillame Soro has announced that he is planning to run for president in 2025, who has been sentenced to a life imprisonment for undermining national security, but also to 20 years due to charges of embezzlement of public funds. While legal & regulatory risk, but also political interference remain medium high. Ivory Coast is forecasted to report a growth of 6.2% in 2023 and 6.6% in 2024. Supply chain disruption remains medium. The country remains as the world’s largest producer and exporter of cocoa, but is also a major exporter of palm oil, coffee and oil. CPI is expected to slow   in 2023 to 4.3% and decrease even further to 2.3% in 2024. Many countries in the Sub-Saharan Africa area have proven to struggle under the latest inflationary pressures, however Ivory Coast has managed to keep CPI inflation at a reasonable level. The Central Bank has increased interest rates to 5.2%, compared to a 4.5% in late 2022. Current account deficit is also expected to -3.8% in 2024, while government debt/GDP at 56% is manageable. Therefore, sovereign non-payment experienced a decrease from high to medium high and as exchange transfer remains medium. The currency utilised in Ivory Coast is the West African CFA franc, a currency utilised by also 7 other states, which is pegged to the euro. The risk of doing business and the inability of government to provide fiscal stimulus remain medium high and banking sector vulnerability remains medium low. 

Eritrea (ERI)
Eritrea’s overall risk level remains very high. Isaias Afwerki remains president of Eritrea, since 1993, as no elections have occurred since. Political interference and legal & regulatory risk remain very high, with corruption at great levels and political violence at a high. Amnesty International accused Eritrea’s military of continued war crimes, in Tigray, despite a peace agreement being signed in November 2022. There have been cases of rape, sexual enslavement, but also executions allegedly. Eritrean authorities have decided to not get dragged into the agreement between Somaliland and Ethiopia, which gives access to the latter to the Red Sea. However, the president of Somalia recently declared Eritrea’s support after a meeting between the two leaders, but there has not been any official statement from Afwerki.  The risk of tension with Ethiopia remains however. Meanwhile, supply chain disruption remains medium high. Growth is forecast to reach 2.6% in 2023 and 3.1% in 2024, according to the African Development Bank Group. The current account surplus is projected to drop to 10.8% in 2023 and reach 10.2% by 2024, due to fluctuations in commodity prices. Sovereign non-payment remains high due the debt distress caused by excessive government debt/GDP, with exchange transfer also very high with this background. Eritrea’s currency, the Eritrean Nafka is pegged to the USD at a rate of USD1 for NFK15. This fixed exchange rate has allowed Eritrea to protect the Nafka from devaluing and makes it one of the “strongest” in Africa. The risk of doing business remains very high, as corruption and violence levels in Eritrea, do not make it an attractive location for a business. Banking sector vulnerability remains medium high, as the inability of government to provide fiscal stimulus remains high. 

Equatorial Guinea (GNQ)
Equatorial Guinea’s overall risk level remains high. Teodoro Obiang Nguema Mbasogo remains president of the country since 1979, after dominating the 2022 presidential elections with 97% of the vote. Manuela Roka Botey, has been appointed as prime minister by the president, the first woman to fill this role. Political violence has decreased from medium high to medium, though political interference and legal & regulatory risk remain very high, with the country being one of the most corrupt countries in the world. Even so, the crime rate is still high in Equatorial Guinea, with human rights violations occurring constantly in the country. Additionally, more than 60% of the population struggle to live with an income less than 1$ a day. Supply chain disruption remains medium high. Growth in 2023 is expected be -6.2% and still a recessionary -5.5% in 2024, according to the IMF, this is large due to a decrease in oil production. The economy of Equatorial Guinea is also highly depends on the production of natural resources, such as cocoa, coffee and petroleum and this cause economic volatility. The president had a meeting with Vladimir Putin recently regarding the extraction of natural resources by Russian companies in Equatorial Guinea. CPI is forecasted to drop to 2.4% in 2023, but then rebound to 4% in 2024, according to the IMF. The Bank of Central African States, which operates as the Central Bank for 6 African countries including Equatorial Guinea, increased the interest rate by 0.5% in April 2023, from 4.5% to 5%, and it has remained stagnant since. It is projected that the country will face a current account deficit of -2.6% in 2023, a 12.2% decrease and reach -3% by 2024, according to the IMF. Sovereign non-payment remains medium high, with exchange transfer at a high. The Central CFA franc, is the currency utilised domestically and is pegged to the euro. The risk of doing business remains very high, due to the great levels of corruption, as banking sector vulnerability remains medium low. 

Ethiopia (ETH)
Ethiopia overall country risk rating remains high due to instability and economic tensions.  Instability still exists internally though has improved a lot since the November 2022 peace agreement between the government and the Tigray people liberation army (TPLA).  However, clashes in Amhara between Fano militia and Federal troops have been evident in summer 2023, while differences remain over the old Western Tigray province within Amhara.  Meanwhile, tensions have been rising with the Eritrean government in recent months and also now with Somalia after Ethiopia agreed a deal with Somaliland to lease a port and build a military facility on the Red Sea – Ethiopia has used Djibouti port in recent years.  Tensions have also grown with Egypt over the Grand Ethiopia Renaissance Dam that could slow the flow of water to Egypt. These regional tensions need to be followed closely in 2024.  This means the political violence measure remains very high, while political interference and supply chain disruption measures are high. On the economic front, the broader picture is that the government wants to get growth back to around 6% per annum, which is feasible given the population dividend is also a big tailwind.  Even so, Ethiopia needs to also bring inflation under control (projected to be back only to 20% by mid-2024 by the central bank), both for domestic macroeconomic stability put also to slow the currency depreciation and as FX reserves remain poor.  Meanwhile, progress on external debt has been slow, with private bondholders and the government not progressing discussion and Ethiopia default on a coupon payment in December 2023.  The default does not stop a bond restructuring or Ethiopia request for up to USD 2 bln from the IMF, but other issues continue to stall progress. A further complexity for Ethiopia is that the U.S. has previously pushed for transitional justice for victims of the recent war in Tigray to come first, before support for IMF and U.S. bilateral aid are forthcoming.  This all keeps a floor under the sovereign nonpayment risk at medium-high and risks a rise in this rating. Meanwhile, a UN panel of experts has recently been 7critical of the process. One major improvement has been the surprise BRICS membership from January 2024 for Ethiopia, which will benefit external trade long-term and could also bring soft loans from the BRICS development bank.

Gabon (GAB)
Gabon’s overall risk level remains medium high. Ali Bongo remains officially president of Gabon after being re-elected in 2023. However, he was overthrown by his cousin and general Brice Oligui Nguema and the military by organising a coup d’état against him. Political violence remains medium, with political interference and legal & regulatory risk at a high. Nguema currently serves as an interim president and has promised for free elections in 2025. Gabon’s junta appointed Raymond Ndong Sima, an interim prime minister, former presidential opponent of Ali Bongo. The Bongo family has ruled Gabon for the past 55 years. The transitional leaders have tried to rebuild trust in the government by arresting those accused of embezzlement of state funds, forgery and other crimes. For instance, the First Lady and her son have been charged with corruption. Supply chain disruption remains medium high. Growth is expected to decrease in 2023 to 2.8% and to 2.6% by 2024. Gabon is one of the countries that the US are trying to evict from the African Growth and Opportunity Act (AGOA) trade program. Gabon’s petroleum products account for 80% of the total exports and the United States is their biggest trade partner to whom they export about 50% of their total exports. CPI is projected to become more stable in 2023 at 3.8% and decrease even further in 2024 to 2.5%. The central bank of Gabon has increased the interest rate to 5% from 3.5% over the past 12 months to help control inflation. Gabon is expected to experience a deficit in 2023 of -0.8%, after achieving their first surplus in 2022 in many years, and a deficit of -2.1% in 2024, according to the IMF. Sovereign non-payment remains medium high, as exchange transfer remains medium. The risk of doing business remains high, due to high levels of corruption, as banking sector vulnerability remains medium low.

Gambia, The (GMB)
Gambia’s overall risk level remains medium high. Adama Barrow remains president of the country, with Dawda Jawara as prime minister. Political violence, political interference and legal & regulatory risk remain medium high. The alleged leader of an attempted coup was found guilty of treason and has been sentenced to jail for 12 years. A trial is also ongoing in Switzerland regarding former minister Ousman Sonko, who is being accused for murder, rape and torture. Supply chain disruption remains medium high. Gambia is expected to report a growth of 5.6% in 2023 and 6.2% in 2024, according to the IMF. Gambia’s CPI is forecast to rise to 17% in 2023 and decline to 12.3% in 2024. Gambia’s central bank has increased the key interest rate from 13% to 17% over the past 12 months, following the high level of inflation. The current account deficit is projected to drop to -5.0% of the GDP in 2023, but then steady at -5.2% in 2024. Sovereign non-payment thus remains medium high with the weak current account position, while exchange transfer at a medium low. Gambia’s currency, the Gambian dalasi, which operates under a floating rate has slightly depreciated over the past 12 months. The risk of doing business remains high, while the inability of government to provide fiscal stimulus drops from medium high to medium.

Ghana (GHA)
Ghana’s overall risk remains medium high. Nana Akufo-Addo remains president of Ghana since 2020 and will step down after the 2024 elections, following his two terms in office. Mahamadu Bawumia has been elected by the New Patriotic Party (NPP), as the candidate for the next election and will face Dramani Mahama, who was president from 2012 to 2017. Mahama is most likely to win the elections.  Political violence, legal & regulatory risk, as well as political interference remain medium. Multi-day protests occurred in September over the high cost of living and lack of jobs, as Ghana currently suffers from one of the worst economic crisis in the country’s history. Protests also occurred, demanding the resignation of the governor of the Central Bank and his two deputies after reporting a loss of around USD5.2 bln in 2022. Supply chain disruption remains medium. Ghana is expected to report a growth of 1.2% in 2023 and 2.7% in 2024, according to the IMF. Gold, cocoa and oil remain the sectors that fuel economic growth. Ghana is forecast to report an extremely high CPI in 2023, equal to 42.2% and only slow to 23% in 2024. These levels of inflation have caused great frustration to the people of Ghana, where around a quarter of the population lives on less than USD2.15 a day. The Central Bank of Ghana has tried to continuously increase the key interest rates, to fight inflation, but 2024 inflation is still projected at 15%. The current account deficit remains stable, as it is expected to be stable at -2.5% in 2023 and -2.8% in 2024. The IMF has agreed to loan USD3 billion to Ghana over 3 years, in order to face the country’s problems. Sovereign non-payment remains medium high, while exchange transfer falls from medium high to medium. The Ghanaian Cedi has proved to be stable in 2023 against the G10 currencies, after a large depreciation of the currency in 2022. The risk of doing business and the inability of government remain medium high. 

Kenya (KEN)
Kenya overall country risk rating remains at medium-high. Internal tensions and deaths from violence means that the political violence measure remains elevated at high and political interference medium-high.  The slowdown in inflation reduces cost of living pressures, but protests and violence are also a function of local taxes and political disagreement over county boundaries.  The independent election and boundaries commission is due to report in March 2024 and this could cause increased tensions. Violence has also been seen in Garissa (Al Shabaab) and Samburu (Militias).  In contrast, the economy is doing well and 5% plus growth should be achieved in 2024 and beyond.  Kenya has also recently signed economic partnership agreement with the EU. The medium-high rating for risk of doing business and supply chain disruption reflects the domestic political violence more than economic issues. Timely tightening from the central bank is also reducing inflation and helping macroeconomic stability and reducing downward pressure on the Kenyan Shilling. This should keep the exchange transfer risk at medium. Finally, though the overhang of domestic and foreign debts is a restraining influence, the government plan is to repay the USD 2 bln bond repayment in June 2024 using IMF and borrowing from the Eastern and Southern Africa Trade and Development bank.  Provided this is successful then pressure will ease and the sovereign non-payment risk should remain medium-high.

Mauritius (MUS)
Mauritius’s overall risk level remains medium low. Prithvirajsing Roopun remains president of the country, with Pravind Jugnauth as the country’s prime minister. Elections are expected to occur towards November 2024. Political violence, political interference, as well as legal & regulatory risk remain medium low. The Mauritian prime minister promised to all individuals that wish to move to Chagos would be able to do so in accordance with the laws of Mauritius, after the “Chagossians” were forced off by British troops in the late 1960s and early 1970s. According to the Human Rights Watch, the US and UK have committed crimes against humanity by displacing these individuals from the Chagos archipelago. Moreover, the Supreme Court of Mauritius decided to remove the anti-homosexual law, which found guilty people that were in same-sex relationships. Supply chain disruption remains medium low. Growth is expected to slow in 2023 to 5.1%, and decrease even further in 2024 to 3.8%, according to the IMF. CPI is forecasted to decline to 7.8% in 2023 and reach 6.5% by 2024. The central bank of Mauritius has decided to keep the key interest rate stagnant at 4.5% in the past 12 months. The current account deficit is projected to decrease in 2023 to -6.2% and to -4.1% by 2024, as tourism continues to recover. Sovereign non-payment has increased from medium low to medium, with exchange transfer at a medium. The currency utilised domestically, is the Mauritian rupee, which the Central Bank of Mauritius is planning to also digitalise. Banking sector vulnerability has risen from medium to medium high, while risk of doing business remains medium low and inability of government to provide fiscal stimulus remains medium high. 

Nigeria (NGA)
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. The election results faced opposition contestations, citing irregularities in the vote count and failure to inform results in real time. Despite the challenges, the court dismissed the opposition's claims. Subsequent governorship elections in critical Nigerian states in November 2023 were marred by violence, reflecting the prevailing insecurity. Nigeria contends with security issues, including terrorism in the north-east, separatist movements in the south-east, and recent attacks in the country's center resulting in over 110 casualties, contributing to a very high risk of political violence. The government has undertaken measures to improve the business environment by expediting permit processes, digitalizing document registration, and simplifying tax payments. However, corruption remains a significant concern, underscored by scandals involving former oil and humanitarian ministers. More recently, the raid on Billionaire Dangote's office has heightened anxieties among Nigerian businesses, making the legal and regulatory a high risk. Companies face additional challenges stemming from frequent power outages, port congestion, infrastructure gaps, cumbersome customs procedures, and exposure to natural disasters, with estimated flood damages reaching up to USD 9 billion. Therefore, the supply chain disruption risk is very high.  Obtaining foreign currency to operate effectively is also a significant hurdle reported by businesses. Overall, the risk associated with doing business in the country is assessed as very high. In terms of economic developments, the IMF expects Nigeria’s economy to grow 3.1% both in 2024 and 2025. Similarly, the World Bank projects that growth will be driven by a recovery in the agricultural and sector services, alongside increased government spending (investment in road, rail, and port infrastructure). It will also be supported by the policies adopted by the government at the beginning of the term, i.e. removing the gasoline subsidy and unifying the exchange rate, and the proposed change to 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. The Fund foresees Nigeria’s general government gross debt (as % of GDP) at 41.3% in 2024 and 40.3% in 2025, a notable increase from 27.7% in 2018. The latest report from the country’s Debt Management Office, from December 2023, states that the country reduced its external debt by redeeming a USD 500 million Eurobond and the payment of USD 414 million as the first principal repayment of the USD 3.4 billion loan secured from the IMF in 2020 during the COVID-19 pandemic. The sovereign non-payment risk is medium-high. The exchange transfer risk is high, with currency restrictions lifted after President Tinubu assumed office, leading to the devaluation of the overvalued Naira. This has posed challenges for companies, exemplified by Cadbury Nigeria Plc's plan to convert foreign-currency loans from its parent company into equity to mitigate higher financing costs resulting from the Naira devaluation.

Rwanda (RWA)
Rwanda’s overall risk level remains medium. Paul Kagame remains president of the country since 2000, as Edouard Ngirente remains prime minister. Political violence remains low, as political interference and legal & regulatory risk remain medium. UK’s Prime Minister, Rishi Sunak, has created a plan for immigrants that seek UK asylum to be sent to Rwanda, where they will be granted refugee status and allowed to stay. So far no asylum seeker has been sent to Rwanda, despite the asylum plan beginning from January 2022. The UK Supreme Court has ruled this scheme unlawful. Meanwhile, Rwanda has now come into agreement with Jordan over cooperation, in the health industry, as well as economic, trade and agricultural. They have both now applied a tax agreement that would eliminate double taxation and tax evasion. Supply chain disruption remains medium low. Growth is expected to slow in 2023 to 6.2% and then rebound to 7% in 2024, according to the IMF. Rwanda’s economy highly depends on the production of agricultural products, which accounts for 35% of the GDP and employs about 70% of the population. CPI is expected to reach a peak of 14.5% in 2023 and drop to 6% by 2024, falling in the country’s 2%-8% target. One of the causes of this expected drop in inflation is the discretionary monetary policy of Rwanda’s Central Bank, that has raised the key interest rate to 7.5% from 6.5% over the past 12 months. Rwanda’s current account deficit is forecasted to increase to -12.7% in 2023 and remain wide at -11.3% in 2024. Sovereign non-payment and exchange transfer remain medium. The domestic currency, the Rwandan Franc has depreciated in value by about 16% against the USD over the past 12 months. The risk of doing business and the inability of government to provide fiscal stimulus remain medium, with banking sector vulnerability at a medium low. 

Sao Tome and Principe (STP)
Sao Tome’s overall risk level has decreased from medium high to medium. Carlos Villa Nova remains president of the country, as Patrice Trovoada remains prime minister. Political violence remains medium, as political interference and legal & regulatory risk remain medium high. The United Nations have agreed to a cooperation framework with Sao Tome from 2023-2027, which aims to strengthen sectors, such as health and education, but also to develop economically, environmental protections, but also it focuses on different financial mechanisms on renewable energy. Even so, supply chain disruption remains medium high for now. Growth is expected to be 0.5% in 2023 and then increase in 2024 to 2.4%, according to the IMF. CPI is forecast to rise to 20.8% in 2023, but then decrease in 2024 to 11.8%. Despite the global inflationary pressures, Sao Tome’s Central Bank has not changed the key interest rate over the past 12 months. The current account deficit is also projected to increase in 2023, reaching -14.9% of GDP and remaining a wider -10% in 2024. Sovereign non-payment thus remains medium with exchange transfer at a medium low. The currency utilised in Sao Tome is the São Tomé and Príncipe dobra, which is pegged to the euro. The risk of doing business remains high, as banking sector vulnerability and the inability of government to provide fiscal stimulus remain medium. 

Somalia (SOM)
Somalia’s overall risk level remains very high. Hassan Sheikh Mohamud remains president of the country after being elected in May 2022, as Hamza Abdi Barre remains prime minister after being appointed by the president in June 2022. Political violence, political interference and legal & regulatory risk remain very high. Al Shabab, which is a Sunni Islamic terrorist group continues to create problems for the Somalian government, as they recently captured a UN helicopter in Central Somalia and have been accounted for at least 13 deadly events over the past 12 months. The president has announced a 1-year deadline to eliminate all Al-Shabab militants, a process that has been proven to be challenging, due to the recent floods, that impacted about 2.4 million people. However, Somalia’s military forces have managed to capture back areas from Al-Shabab, since August 2022, when the leaders of Somalia announced an offensive against the terrorist group. The minister of defence recently resigned, in an act of protest, against the deal signed between Somalia and Ethiopia, that grants access to the latter to a seaport and therefore to the Red Sea and in exchange Somaliland (the breakaway province) will be recognised as an independent state. Supply chain disruption remains very high. Somalia is expected to report a growth of 2.8% in 2023 and 3.7% in 2024, according to the IMF. CPI is forecasted to drop in 2023 to 5.7% and continue to drop in 2024 to 4.1%. Even so, the current account deficit is expected to rise to -9.6% in 2023 and reach -10.1% by 2024. However, Somalia is set to receive a major debt relief of USD 4.5 bln, in an agreement with the World Bank and the IMF, that will drop the external debt/GDP ratio from 65% to just 6%. This will allow Somalia to re-join the global financial system after 30 years of absence. Sovereign non-payment remains high but could improve in the coming quarters with the World bank deal, while exchange transfer remains medium. The currency utilised in Somalia is the Somalia shilling and has been stable against the USD. The risk of doing business remains very high, due to the violent environment and being one of the most corrupt countries in the world, while the banking sector vulnerability remains medium.

South Africa (ZAF)
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. The political interference risk has increased to medium-high level compared to the previous risk analysis period in advance of the approaching 2024 general election (scheduled between May and August, 2024).  Opinion polls suggest that the ANC will likely have less than 50% of the votes in the upcoming elections and will likely need to form a coalition with the Democratic Alliance or other small parties. On the economic front, risks to the inflation outlook are skewed to the upside as the electricity prices continue to present clear inflationary risks, along with logistical constraints, which are likely to have broader effects on the cost of doing business and are likely to keep social tensions high. When we analyze the last four months of 2023, we see the load shedding relatively got better in the first half of November, particularly after strong scheduled electricity blackouts and load-shedding in September, but the power cuts returned back in late November due to numerous factors such as breakdowns of coal-fired power plants, unit repairs, theft of electricity transmission infrastructure and widening demand-supply gap. Despite hurdles, the economy will still be supported by a trade surplus in 2024 coupled with probable FED and ECB easing pressure on the South African Rand (ZAR), which can increase investor’s appetite for South Africa and trigger a strengthening cycle for ZAR while we expect a moderate fall in trade surplus mostly due to global slowdown, particularly China. The ease of doing business, which remains at medium-high, will not be helped by the elections, 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.  

South Sudan (SDN)
South Sudan’s overall risk level remains very high. Salva Kiir Mayardit remains president of the country, since 2011 after the country gained independence from North Sudan. Presidential elections will occur for the first time in 2024, according to the president. Political violence, political interference, as well as legal & regulatory risk remain very high. Disputes between Sudan and South Sudan occurred in November leading to 75 deaths. 30 civilians have also been reportedly killed in an incident that took place in Jonglei State, in what was perceived as a cattle raid by armed youth. Similar incidents occur relatively often in South Sudan, a situation that the government hasn’t managed to stabilise. Supply chain disruption remains very high. Growth is projected to increase to 3.5% in 2023 and reach 4.5% in 2024, according to the IMF. Sudan is one of the most oil dependent countries in the world, but is also rich in other natural resources, such as gold, diamonds and silver. CPI has not managed to stabilise in South Sudan, reaching 16.3% in 2023 and projected to decline to 13.6% in 2024, according to the IMF. The current account surplus is expected to decrease to 2.3% in 2023 and to 2% by 2024, according to the IMF. Sovereign non-payment and exchange transfer have increased from high to very high, given the political instability and the large government debt/GDP. The domestic currency, the South Sudanese pound, which was created after South Sudan gained independence in 2011, has depreciated by about 47% against the US dollar over the past 12 months. The risk of doing business in South Sudan is very high, as the constant violence does not allow for businesses to operate efficiently, with the inability of the government to provide fiscal stimulus very high.

Sudan (SDN)
Sudan’s overall risk level remains very high. Abdel Fattah al-Burhan remains the de facto leader of Sudan, who was handed control after the revolution that occurred in 2019. Political violence, legal & regulatory risk, but also political interference remain very high. A civil war begun in the country, on the 15th April 2023 between the Sudanese Armed Forces and the Paramilitary Rapid Support Forces, mostly around the capital Khartoum. This war has led to more than 10,000 deaths, but also 6 million people have reported to have been forced to flee their homes, with 1.2 million of them moving to neighbouring countries. The Rapid Support Forces refers to Janjaweed militias that fought in a conflict that took place in Darfur in the 2000s. The Sudanese Armed Forces refer to the military forces of the Republic of Sudan, to whom Abdel Fattah al-Burhan is the commander-in-chief. Supply chain disruption also remains very high. 2023 Growth is expected to be -18.3%, according to the IMF, with sky high inflation of 256% in 2023.  Such high inflation, has been caused by the depreciation of the Sudanese pound after the beginning of the civil war and lost over 50% of its value. Sovereign non-payment and exchange transfer have increased from high to very high due to this macroeconomic collapse. The risk of doing business, as well as the inability of government to provide fiscal stimulus remain very high. Corruption continues to be a major issue for businesses, as it is considered one of the most corrupt countries in the world, but also due the current civil war, Sudan cannot be considered as an attractive location for businesses. 

Togo (TGO)
Togo’s overall risk level remains high. Faure Gnassingbe remains president of Togo since 2005, with Victoire Tomegah Dogbe’ as prime minister, since Gnassingbe appointed her in 2020. Political violence, political interference and legal & regulatory risk remain high, as corruption resumes to be a big issue. Togo’s MPs will sit in office more than they were elected to govern, due to delays in polls which were scheduled to be by December 31 2023. Two journalists have also been imprisoned for defaming a politician on social media, because he did not report the amount of cash that was stolen after a burglary at his home, according to them. Supply chain disruption remains high. Growth is forecasted to slightly drop to 5.4% in 2023 and to 5.3%, according to the IMF. Togo is considered the tenth poorest country in the world, while highly depending on the agricultural industry. CPI is projected to be at 5.0% in 2023 and continue to drop in 2024 to 2.8%. Togo has faced several challenges lately, such as the effect on energy and food prices by Russia’s invasion in Ukraine, slowing external demand and tighter financial conditions. The Central Bank of West African States, which includes countries, such as Senegal, Ivory Coast and Togo, has increased the key interest rate over the past 12 month in their effort to reduce inflation. Togo’s current account deficit is forecast to decline to -3.1% in 2023 and -2.7% in 2024. Togo operates under the West African Franc, which is pegged to the euro at a rate of 1 EUR per 655.957 CFA.  Sovereign non-payment and exchange transfer remain high, given structural economic weakness. The risk of doing business, as well as the inability of government to provide fiscal stimulus remain high. 

Uganda (UGA)
Uganda’s overall risk level remains medium high. Yoweri Museveni remains president of the country since 1986. Political violence, legal & regulatory risk, as well as political interference remain high in Uganda. Museveni signed an anti-LGBTQ law earlier this year, which can potentially lead to life imprisonment or even the death penalty for those convicted of “aggravated homosexuality”. This law has received criticism globally, with the World Bank halting any new loans to Uganda. Joe Biden announced that he wanted to exclude Uganda and 3 other African countries from the African Growth and Opportunity Act (AGOA), which is an agreement between the US and African countries to trade freely, without any barriers. For instance, Uganda would export coffee to the US without any import tax, but now due to violations of human rights Joe Biden wants to remove them from AGOA. Supply chain disruption remains medium high. Uganda is forecasted to experience solid growth in 2024, with a forecast of 5.7%, according to the IMF. CPI is also forecast to decrease 4.7% in 2024. Sovereign non-payment remains medium high and as exchange transfer remains medium. The government of Uganda is prepared to borrow $150 million from China, due to the halt of the World Bank to any new loans. Banking sector vulnerability remains medium low, as the risk of doing business remains high. Corruption consists of one of the biggest challenges for business operating in Uganda. The inability of government to provide fiscal stimulus has decreased from medium high to medium helped by a peak in the government debt/GDP trajectory at modest levels and lower than other African countries. 

Zambia (ZMB)
Zambia’s overall risk level remains medium high. Hakainde Hichilema remains the president of Zambia after being re-elected president in 2021. Political violence remains medium, as political interference remains medium high. Legal & regulatory risk has been reduced from high to medium high. Corruption continues to exist in high levels in Zambia, in the business sector but also the judicial system. Supply chain disruption has dropped from medium high to medium. The growth rate in 2023 is projected to at 3.6%, but then increase to 4.3% in 2024. The Zambian economy continues to focus on the production of copper, which account for a great amount of the country’s exports. CPI is forecasted to decrease in 2023 to 10.6% and in 2024 to 9.6%, according to the IMF. The interest rate continues to rise in Zambia, since early 2023 from 9 to 11% in November, applying a contractionary monetary policy to fight the high levels of inflation. Zambia’s current account surplus is expected to increase in 2023 to 3.8% and 7.1% in 2024. Zambia has faced challenges restructuring their debt, especially towards an international bondholder group to whom. Zambia’s official creditors and the IMF have expressed reservations over the debt restructuring plan of Zambia. Sovereign non-payment remains high, with exchange transfer at a medium. The Zambian currency, the Zambian Kwacha, has depreciated over the last 12 months. The risk of doing business remains medium high, as the inability to provide fiscal stimulus remains high. The high levels of corruption in Zambia make it an unattractive location for non-commodity businesses.

Zimbabwe (ZWE)
Zimbabwe’s overall risk level remains very high. Emmerson Mnangagwa remains president of the country after winning the 2023 presidential elections. Political violence and political interference remain high, with legal & regulatory risk very high. Corruption continues to be a major issue domestically, in the forms of patronage, abuse of power, bribery and extortion. Speculation took place after the elections, with the opposition leader claiming that the elections were a “gigantic fraud”, but also that his party has evidence that they won. The Southern African Development Community (SADC) election observer felt that the polls lacked credibility. Zimbabwe is also currently facing an economic crisis, with great levels of poverty and hyperinflation. Supply chain disruption has decreased from high to medium high. Zimbabwe is expected to report a growth rate of 4.1% in 2023 and 3.6% in 2024, according to the IMF. However, CPI has become a great challenge for Mnangagwa and his cabinet since being in office since 2017 something that he has not managed to address yet. CPI is forecasted to be 314% in 2023 and 222% in 2024, Sovereign non-payment has decreased from high to medium high (as inflation reduce government debt/gdp) and exchange transfer remains medium high. The currency utilised in Zimbabwe is the United States dollar. The risk of doing business remains very high, due to the great levels of corruption, as the inability of government to provide fiscal stimulus remains high due to sky high inflation.