Sub Sahara Africa: Country Risk Ratings

Cameroon (CMR)

Cameroon’s overall risk level remains medium high. 91-year-old Paul Biya has remained president of the country, since 1982. Political violence and political interference remains high, with legal & regulatory risk at a very high rating, due to great levels of corruption. President Biya has not yet announced his candidacy for re-election in the 2025 presidential elections. The leaders of Cameroon’s main opposition party have been reportedly negotiating with many other parties to present just one opposition candidate. Kamto, leader of the Cameroon Renaissance Movement Party has formed along with other opposition members a coalition named The Political Alliance for Change (PAC), which is led by Jean-Michel Nintcheu and has been characterised as illegal by the government.  Kamto has urged Cameroonian citizens that believe that the current regime is the main problem of Cameroon to join the PAC. The eligibility of Kamto running for the presidency is still questionable due to article 121 of the Electoral Code. Elsewhere, Cameroon has now started the world’s first routine vaccine programme against Malaria after 40 years in the making. Supply chain disruption remains very high. Growth is expected to reach 4.3% in 2024 and 4.5% by 2025, according to the IMF. CPI is forecast to decline by 1.3% in 2024 to 5.9% and reach 5.5% by 2025. Cameroon’s current account deficit is projected to remain stagnant in 2024 and 2025 at -2.8% of GDP, with a government debt/GDP ratio of 39.2% in 2024. Thus sovereign non-payment remains medium high, as exchange transfer remains medium. The currency utilised in Cameroon is the Central African CFA franc, which is pegged to the euro at a rate of 1 euro per 655.96 francs. The risk of doing business is high, with businesses having to face challenges such as poor infrastructure, high levels of corruption and lack of access to finance. Banking sector vulnerability remains medium low and the inability of government to provide fiscal stimulus at a medium.

Cote d’Ivoire (CIV)

Cote d’Ivoire’s overall risk level remains medium high. Alassane Ouatara, leader of the Rally of Republicans (RDR) remains president of the country. Political violence, political interference and legal & regulatory risk remain medium high. Laurent Gbagbo, former president and founder of the African People’s Party will lead the party into the 2025 presidential elections. President Ouatara has not yet announced that he will be running for re-election. Meanwhile, Ivory Coast has now opened a 37.5 megawatt solar power plant, in an effort to produce more renewable energy. The country hopes that it will achieve its renewable energy target to reach 45% of the total energy by 2030. Ivory Coast, the world’s biggest cocoa producer has decided to raise the official farm gate prices by 50%. Cocoa exporters are struggling with the production of cocoa beans, due to bad weather conditions and diseases. Experts suggest that there will be a large global cocoa deficit. Supply chain disruption remains medium. Growth is expected to rise to 6.5% in 2024 and rebound to 6.4% in 2025, according to the IMF. Ivory coast is very dependent on the agricultural sector which employs almost half of the country’s population and accounts for about 25% of its GDP. CPI is forecast to drop to 3.8% in 2024 and reach 3% by 2025. Ivory Coast’s current account deficit is projected to decline to -3.8% of GDP in 2024 and further decline to -2.6% in 2025, with a government debt/GDP ratio of 57.7% in 2024. The country has come to an agreement with the IMF for a $1.3 billion programme to address climate change issues, particularly in agriculture. Sovereign non-payment remains medium high, with exchange transfer has increased from medium to medium high. Ivory Coast operates under the West African CFA franc, which is pegged to the euro. The risk of doing business remains medium high, with businesses facing challenges, such as corruption, poor infrastructure, poverty and a shortage of skilled workers. Banking sector vulnerability remains medium low, as the inability of government to provide fiscal stimulus remains medium high.

Eritrea (ERI)

Eritrea’s overall risk level remains very high. Isaias Afwerki remains president of the country, since 1993. National elections have not occurred in Eritrea, since it gained independence from Ethiopia. Eritrea ranks in one of the worst countries in the world with regards to human rights and political freedom. Political violence remains high, with legal & regulatory risk and political interference very high. The government of Eritrea has been continuously trying to improve the quality of health care they provide to their citizens, but also make it free, during the past three decades. This goal has now been mostly achieved. For instance, over the past 20 years, delivery at health facilities has now reached 83.7% from 6%, the universal immunization rate currently stands at 98% and national health facilities have increased from 93 to 347. Eritrea has also invested immensely into the educational system, by building new schools and enhancing the teacher labour force. A massive cyber-attack to the government’s system was attempted on May 24, but it was terminated by the government’s defence mechanisms. Supply chain disruption remains medium high. Growth is expected to rise in 2024 and 2025, due to Chinese investment in the mining sector of Eritrea. The agricultural sector accounts for around 20% of the GDP, as the mining sector also accounts for around 20% of the GDP. The poverty level in the country lies around 66% of the population in Eritrea. Sovereign non-payment remains high and exchange transfer remains very high. The Eritrean Nafka, the local currency, is pegged to the US dollar at rate of 1USD per 15 ERN. The risk of doing business in Eritrea remains very high, due to the high corruption level and the country’s political climate. Banking sector vulnerability remains medium high.

Ethiopia (ETH)

Ethiopia’s overall country risk rating remains high, with political violence remaining very high.  Internal instability remains after January and February clashes in Amhara between Fano militia and Federal troops, including allegations of civilians being killed by government forces – the U.S. and EU have protested.  Separately, drought in Tigray is increasing risks to the fragile peace in the North. Meanwhile, tensions have been rising further with the Somali government, which in April expelled the Ethiopian ambassador and closed two consulates in protest at Ethiopia signing a MOU with Somaliland to lease a port and build a military facility on the Red Sea.  The situation is tense and could escalate if Ethiopia tries to implement the plan, though the Somali government remains weak and unable to control Somaliland. This also means the 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 in a post Tigray recovery, which is feasible given the population dividend is also a big tailwind. Even so, Ethiopia still needs to bring inflation under control (projected to be 25.6% by the IMF in 2024), both for domestic macroeconomic stability but also to slow the currency depreciation as FX reserves remain poor. Meanwhile, Ethiopia default on a coupon payment in December 2023 does not stop a debt restructuring or Ethiopia’s request for up to USD 3.5 bln from the IMF, but agreement on the IMF deal was not reached in the April negotiating round.  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 is forthcoming.  This all keeps a floor under the sovereign non-payment risk at medium-high and risks a rise in this rating.

Ghana (GHA)

Ghana’s overall risk level has decreased from medium high to medium. General elections will be held in December, where Nana Akufo-Addo will be ineligible for re-election after two presidential terms. John Mahama, former president from 2012-2017 and leader of the National Democratic Congress will be running for the presidency, while the candidate from the ruling New Patriotic Party will be current vice-president Dr. Mahamadu Bawumia. A new anti-LGBTQ+ bill is in the process of passing, which criminalises any gay relationships and anyone who supports them. The president has noted that he will not sign the bill until all the legal challenges against it are dealt with. Ghana’s supreme court has decided not to speed up the passage of the law. This law could jeopardise a 3.8 billion USD financing from the World Bank and 3 billion USD loan from the IMF. The World Bank had suspended its funding to Uganda after it passed a similar law in 2023. Supply chain disruption remains medium. Growth is expected to rise to 2.8% in 2024 and reach 4.4% by 2025, according to the IMF. Cocoa, one of top exports of Ghana has risen in price by up to 50%. CPI is forecast to drop by 15.2% in 2024 to 22.3% and continue to decline in 2025 to 11.5%. Ghana’s current account deficit is projected to increase to -1.9% of GDP in 2024 and to -2.2% by 2025. Ghana is now trying to restructure their debt of $5.4 billion with its creditors. It is also agreeing a restructuring with holders of its international bonds, according to an IMF official. Sovereign non-payment risk thus remains medium high, with exchange transfer at a medium. The Ghanaian Cedi has depreciated by around 13.7% during the past 6 months. The risk of doing business remains medium high, due to high levels of corruption, inadequate infrastructure and lack of access to finance. Banking sector vulnerability remains medium low.

Guinea-Bissau (GNB)

Guinea-Bissau’s overall risk level remains very high. Umaro Sissoco Embaló currently is the president of the country, but elections will occur later this year. Political violence remains medium, with legal & regulatory risk and political interference at a very high. A major issue in Guinea-Bissau is its political instability. For instance, the president decided to dismiss Geraldo Martins a week after reinstating him and appointed Rui Duarte de Barros as the new prime minister. Martins was initially removed, when the president decided to form a new government, due to an attempted coup. The president has stated that he will continue to fight corruption in the country and assigned the fight against corruption to the new prime minister. Around 70 people were arrested during a demonstration against the political power force in Guinea-Bissau. Meanwhile, President Embaló visited Russia, to discuss with Vladimir Putin the strengthening of bilateral ties. Russia erased Guinea-Bissau’s debt of over $26 million in March and suggested this money should be invested in the educational and health care sectors. Supply chain disruption remains medium high. Growth is expected to rise to 5% in 2024 and stay at 5% in 2025, according to the IMF. Guinea-Bissau depends highly on the agricultural sector which account for around 50% of GDP and more than 90% of the total exports. CPI is forecast to drop by 4.2% to 3% in 2024 and continue declining in 2025 to 2%. The current account deficit is projected to decline to a still high -5.6% of GDP, with a government debt/GDP ratio of 76.5% in 2024. Sovereign non-payment has increased from high to very high and exchange transfer remains medium high. The currency utilised in Guinea-Bissau is the West African CFA Franc and is pegged to the euro. The risk of doing business remains very high, due to the significant level of corruption in the country, poor infrastructure, political instability and lack of divergence. The inability of government to provide stimulus has increased from high to very high.

Kenya (KEN)

Kenya’s overall risk level remains medium high. William Ruto remains president of the country, since being elected in 2022. Political violence remains high, with legal & regulatory risk and political interference at a medium high. The key issue remains internal tensions between regions and dissatisfaction with the government among sections of the population and the associated risk of an increase in violence.  Meanwhile, Kenya, East Africa’s largest economy, has suffered lately by severe floods and landslides, leading to the death of at least 210 people and the displacement of more than 200,000, but also many homes, roads and other infrastructure have been ruined. The Kenyan military has been deployed in order to rescue victims of the floods. Ruto announced in Kenyan television that the situation is expected to escalate and that the country might experience its first ever cyclone. Ruto has defended his government following the criticism that the government’s response to the flood has been slow. Supply chain disruption remains medium high. Growth is expected to slow in 2024 by 0.5%, to 5%, but rebound in 2025 to 5.3%. Kenya has come into a comprehensive economic partnership with the UAE, that will help Kenya’s exports to enter important markets in Asia and the Middle East. However, France, Denmark and Sweden have proposed to restrict the exports of used-clothing from the European Union, something that would seriously hurt Kenya, as the used-clothing industry employs 2 million people. CPI is forecast to drop to 6.6% in 2024 and reach 5.5% by 2025. Kenya’s current account deficit is projected to increase to -4.3% of GDP in 2024, and slightly decrease in 2025 to -4.2%. Sovereign non-payment remains medium high and exchange transfer remains medium. Kenya has received a $941mln loan from the IMF on May 9 and $3bln from the Africa export import bank. Kenya also issued a $1.5 billion Eurobond, after the Kenyan shilling had hit record lows. Since then the shilling has appreciated by about 20%. The risk of doing business remains medium high, due to corruption, current weather conditions, but also weakened consumer spending. Banking sector vulnerability remains medium low.

Malawi (MWI)

Malawi’s overall risk level remains medium high. Lazarus Chakwera, leader of the Malawi Congress Party remains president of the country. Political violence and legal & regulatory risk remain medium, with political interference at a medium high. Vice President Saulos Klaus Chilima was being charged with corruption charges for allegedly providing government contracts to a British businessman. These charges have been dropped after the Director of Public Prosecutions in Malawi filed a notice for the discontinuance of the case. The reasons for the discontinuance remain unknown. Chilima after the dropping of the charges will be eligible to run for the 2025 presidential elections. Meanwhile, four former officials of the Malawi government are being charged of corruption by the United States. Malawi’s government was also a victim of a cyber-attack earlier this year, which led to the temporary suspension of the issuing of passports. President Chakwera mentioned that the attack was a serious breach of national security and that he would not consider negotiating with criminals. Supply chain disruption remains medium high. Growth is expected to rise to 3.3% and reach 3.8% by 2025, according to the IMF. Malawi’s economy is heavily dependent on agriculture, which employs over 80% if the population. CPI is forecast to slightly drop in 2024 to 27.9% and decrease in 2025 to 14.7%. Malawi’s central bank increase the benchmark interest by 200 basis points from 24% to 26% to help the fight against inflation. Malawi’s current account deficit is projected to slightly increase in 2024 to -7.1% of GDP and continue to increase in 2025 to -9.4%. Sovereign non-payment remains medium high and exchange transfer remains high. The Malawian kwacha is a free-floating currency and has declined by about 4% against the US dollar over the past 6 months. The risk of doing business remains high, with businesses in Malawi facing challenges such as lack of skilled labour, high interest rates and poor supply of water and electricity. The inability of government to provide fiscal stimulus remains high.

Namibia (NAM)

Namibia’s overall risk level remains medium. Hage Geingob was president of the country until the 4 of February when he passed away at the age of 82, after being diagnosed with cancer some weeks earlier. Vice president Nangolo Mbumba has taken over as interim president of the country until the elections at the end of the year. SWAPO, the party which has won all previous presidential elections has set current interim vice president Netumbo Nandi Ndaitwah as their presidential candidate. However, polls suggest that the favourite for these elections is Panduleni Itula, leader of the Independent Patriots for Change party, who earned 30% in the last elections. Supply chain disruption remains medium low. Growth is expected to drop to 2.6% in 2024 and stay at 2.6% in 2025, according to the IMF. Namibia is planning to open a new frontier basin, after the discovery of an enormous amount of oil by Shell and TotalEnergies. OPEC has also announced that it is excited about a potential partnership with Namibia to support the African country. Production of oil in Namibia is expected to begin in 2030 and according to current data the peak production could reach 700,000 barrels per day. CPI is forecast to drop by 1.1% to 4.8% in 2024 and stay at the same level in 2025. Namibia’s current account deficit is projected to be a large -7.2% of GDP in 2024, with a government debt/GDP ratio of 65.4%. Sovereign non-payment and exchange transfer remain medium. The Namibian dollar, is pegged to the South Africa rand at a 1:1 exchange rate. The risk of doing business remains medium high. Businesses in Namibia face several challenges, such as lack of access to finance and poor infrastructure.  Banking sector vulnerability remains medium low.

Sierra Leone (SLE)

Sierra Leone’s overall risk level remains high. Julius Maada Bio, leader of the Sierra Leone People’s Party remains president of the country, after being re-elected in 2023. Political violence remains medium, with legal & regulatory risk and political interference high. The president announced a national emergency, due to increasing drug abuse in the country. A drug that was introduced in the country four years ago, the kush is a relatively cheap drug and has been on the rise lately. According to the government hundreds have died from this drug and the president has announced the setup of a national task force to stop its dissemination. The energy minister of Sierra Leone decided to resign after an energy crisis in the country that lasted more than a week, for which he claimed full responsibility. The cause of this crisis was the government’s debt to an energy firm, that provides electricity to the capital Freetown. The situation is now under control, after Sierra Leone paid a substantial amount of their debt. Supply chain disruption remains medium high. Growth is expected to rise to 4% in 2024 and reach 4.5% by 2025, according to the IMF. Sierra Leone highly depends on the agricultural sector which accounts for around 60.7% of the GDP and employs around 66% of the population. CPI is forecast to stay at very high levels with a 2024 forecast at 39.1%, but to decline substantially in 2025 to 21.7%. Sierra Leone’s current account deficit is projected to drop to -2.8% OF GDP with a government debt/GDP ratio of 69.7% in 2024. Sovereign non-payment remains high and exchange transfer remains medium high. The risk of doing business remains high, due to high levels of corruption, lack of skilled labour and poor infrastructure. The inability of government to provide stimulus remains high.

Somalia (SOM)

Somalia’s overall risk level remains very high. Hassan Sheikh Mohamud remains the president of the country, since 2022. Political violence, political interference and legal & regulatory risk remain very high. Six telecoms workers were killed by a roadside explosion in Garasbaley, for which no one has claimed responsibility yet. Al-Shabaab a militant group linked to Al-Qaeda is continuing to carry out attacks on civilian and military targets in order to achieve their goal of ruling Somalia based on Sharia law. Another similar attack occurred in February, which killed at least 10 individuals at a market in the country’s capital Mogadishu. A Somali official announced that the country will never accept Ethiopia’s plan to build a naval base in Somalia, but will only allow commercial access. Following the ongoing dispute between the two countries Somalia has expelled the Ethiopian ambassador from the country. Supply chain disruption remains very high. Growth is expected to rise to 3.7% in 2024 and reach 3.9% by 2025, according to the IMF. Somalia’s economy depends highly on the agricultural sector, which accounts to more than 70% of the GDP and 50% of its exports and employs more than 80% of the labour force. CPI is forecast to drop by 1.3% to 4.8% in 2024 and to 3.9% by 2025. Somalia’s current account deficit is projected to decline to a still high -8.7% of GDP in 2024 and to rebound to -8.8% in 2025. Sovereign non-payment remains high and exchange transfer remains medium. The Somali Shilling is currently pegged to the US dollar at rate of 571 SOS per 1 USD. The risk of doing business remains very high in Somalia, due to the high levels of corruption, the ongoing civil war with Al-Shabaab and poor infrastructure. Banking sector vulnerability remains medium and the inability of government to provide fiscal stimulus remains medium high.

Swaziland (SWZ)

Swaziland’s (Eswatini) overall risk level remains high. Swaziland’s monarchy is still led by King Mswati III, since 1986, with Russell Dlamini as prime minister, since November 2023. Political violence remains medium high, with political interference and legal & regulatory risk at a high. The government of Eswatini is being accused of assisting Russia to register ships, despite the US sanctions. Prime Minister Russell Dlamini is also being accused of stealing the government’s funds, after failing to disclose R210 million.  King Mswati III has assured the new president of Taiwan, Lai Ching-Te of his continued support. In return China has been clear on their intent to oppose Swaziland’s intent to enter and benefit from BRICS, due to Swaziland’s stance towards Taiwan. Political activism in Eswatini is considered terrorism. During the annual workers’ day celebration, there was severe political unrest, with thousands of workers protesting against the government, accusing the king of looting resources and demanding a 3,500 Rand minimum wage. Supply chain disruption remains medium high. Growth is expected to slow in 2024 to 3.7% and continue slowing to 3.3% in 2025, according to the IMF. The unemployment rate in Eswatini is around 33%, with the poverty rate also being considerably high at 58.9%. CPI is forecast to decrease to 3.9% in 2024 and to 3.1% by 2025. Eswatini is projected to maintain a current account surplus in 2024, but slightly slow to 2.1% of GDP, with a government debt/GDP ratio of 37.2%. Sovereign non-payment remains medium high and exchange transfer remains medium. The Swazi Lilangeni, the domestic currency is pegged to the South African Rand at a rate of 1:1. The risk of doing business remains medium high, due to high levels of corruption, lack of access to finance, poor infrastructure and lack of skilled labour force. The inability of government to provide fiscal stimulus remains medium.

Uganda (UGA)

Uganda’s overall risk level remains medium high. Yoweri Museveni, leader of the National Resistance Movement, remains president of the country, since 1986. Political violence, political interference and legal & regulatory risk remain high. Uganda will launch its first oil refining plant that will raise the value of its minerals, but also expand the capacity to export. Uganda’s energy minister was also invited to China in April to discuss about the Uganda’s $5 billion crude oil pipeline. President Museveni has appointed his son Muhoozi as military chief, who will replace William Mbasu Madi. His son was previously removed from his position by his father as commander of Uganda’s land forces, after he made threats in social media about invading Kenya. Supply chain disruption remains medium high. Uganda’s growth is expected to rise to 5.6% in 2024 and to 6.5% in 2025, according to the IMF. Uganda despite US sanctions exported gold worth $2.3 billion, more than 10 times higher than the previous 12 months. CPI is forecast to drop to 3.8% in 2024 and rebound in 2025 to 4.9%. Uganda’s current account deficit is projected to slightly decrease to -7.3% of GDP in 2024, but rebound to -7.6% in 2025. Thus sovereign non-payment remains medium high, with exchange transfer decreasing from medium to medium low. Uganda’s shilling fell to an all-time low against the US dollar, which led to the increase of the key interest rate by 50 basis points to 10% by the Uganda Central Bank. The central bank’s deputy governor mentioned that the fall of the shilling was caused by offshore investors pulling their funds to invest elsewhere with higher yields. The risk of doing business remains high, due to corruption, high taxes, high energy costs and lack of skilled workers. Banking sector vulnerability remains medium low and the inability of government to provide fiscal stimulus remains medium.

Zambia (ZMB)

Zambia’s overall risk level remains medium high. Hakainde Hichilema remains president of the country, since 2021. Political violence remains medium with legal & regulatory risk and political interference at a medium high. Zambia’s hydropower, which is the country’s main source of power has been affected by high levels of drought and Zambia is now planning to import electricity. Hichilema stated that the deficit in the energy sector could be between 450 and 500 megawatts. Due to power shortage in Zambia the Chambisi Copper Smelter has reduced its production by 20%. Zambia is Africa’s 2 largest producer of copper. Zambia also seems to be interested to invest in tin new mining projects, in an effort to attract investors and raise tax and export revenue. Supply chain disruption remains medium. Growth is expected to increase to 4.7% in 2024 and reach 4.8% by 2025, according to the IMF. Zambia’s economy depends highly on mining and agriculture, while the first is the main driver of economic growth and the latter employs 60% of the population. CPI is forecast to increase to 11.4% in 2024, but slow to 7.8% in 2025, a CPI lower than 10% for the first time since 2019. Zambia is projected to experience a current account surplus of 3.7% of GDP in 2024, with a government debt/GDP ratio of 115.2% in 2023. Zambia has been trying to restructure their debt and have recently come into a restructuring agreement with their international bondholders. Zambia also is cooperating with China, who is their biggest creditor to restructure their debt. Zambia’s debt in the end of 2022 was $18.3 billion, of whom $13.4 billion is being restructured. Sovereign non-payment thus remains high and exchange transfer has increased from medium to medium high. Zambia’s currency the Kwacha has depreciated by about 8% against the US dollar over the past 6 months. The risk of doing business remains medium high, due to corruption and lack of skilled labour. The inability of the government to provide fiscal stimulus has increased from high to very high. 

Zimbabwe (ZWE)

Zimbabwe’s overall risk level remains very high. Emmerson Mnangagwa, leader of the ZANU-PF party remains president of the country, after being re-elected in August 2023. Political violence and political interference remain high, with legal & regulatory risk at a very high, due to very high levels of corruption. Nelson Chamisa who received 44% of the votes in the presidential election has decided to resign from his Citizens Coalition for Change (CCC) party, after claiming that his party has been hijacked by the government. Several MPs from the CCC party were removed from their seats, something that Chamisa claimed to be sabotage. Ismael Chockurongerwa, leader of a religious court was arrested for child abuse, after 251 minors were found working in his farm along with 16 graves. Zimbabwe’s cabinet has also decided to remove the death penalty, after months of debate. President Mnanganwa, who is known to be against the death penalty, was placed on death row, after being sentenced for sabotage under British rule in 1965. Supply chain disruption remains medium high. Growth is expected to drop to 3.2% in 2024 and stay at 3.2% in 2025, according to the IMF. Zimbabwe has launched a new currency the ZiG, which will replace its collapsing Zimbabwe dollar and will be backed by gold and foreign currencies, in an effort of the central bank to reduce inflation and provide stability. The central bank has also decided to decrease Zimbabwe’s key interest rate from 130% to 20%. The government has announced that it will fine any business charging a higher interest rate than 13.5 ZiG per US dollar. CPI is forecast to decrease by around 115% in 2024 to 561% and reach 554.7% by 2025, which will likely undermine the currency peg eventually.  Zimbabwe is projected to maintain a current account surplus in 2024, but decline to 0.2%, with a government debt/GDP ratio of 98.5%. Sovereign non-payment thus remains high, with exchange transfer medium high. A staff-monitored programme with the IMF will now be delayed for the third quarter of 2024, after the introduction of the new currency. The risk of doing business remains very high, with businesses in Zimbabwe facing challenges, such as corruption, inflation and the inconsistence of policy making. Banking sector vulnerability remains medium low and the inability of government to provide fiscal stimulus has increased from high to very high.