Sub Sahara Africa: Country Risk Ratings

Angola (AGO)

Angola’s overall risk remains high. João Lourenço is the President with the next set of elections in 2027. Political violence is medium high and political interference is high in a country that is seen as one of the world’s most corrupt. This comes despite government efforts to tackle high levels of corruption such as removing some rules which limited the press and civil society, there remains significant economic inequality, prevalent human rights issues and really poor educational standards, all of which make the risk of doing business high. According to the IMF, real GDP is expected to grow 2.6% in 2024 and 3.1% in 2025. Angola is the second largest producer of oil in Africa, and despite the country leaving OPEC at the end of last year, the oil and gas sector continue to attract business and will allow them to operate a modest current account surplus with the IMF projecting a current account surplus of 4.9% of GDP in 2024. Even so, export struggles were present last year and will always pose a threat to future growth with volatile oil and energy prices and poor infrastructure in recent years, Angola have not been able to keep oil production to levels of the past. This coincides with the government fuel subsidies which have come at a huge fiscal cost. The finance minister has promised to fully scrap these subsidises by the end of 2025, but strong opposition exists through violent protests. The IMF forecast that government debt will reach 70.3% of GDP this year which is the same level as the estimated average for emerging and middle-income economies. These plans should allow for more fiscal headroom resulting in their government’s inability to provide fiscal stimulus falling to a medium high level, but difficulties to issue new debt and the massive sums of money used to subsidise fuel and service debt interest, halting investment into social programmes. Additionally, Angola have been exposed to currency woes. Last year, the kwanza fell 40% against the US dollar. The weak currency will continue to make imports expensive hindering growth and resulting in high inflation expected to reach 22.0% in 2024 but fall to 12.8% next year, but current inflation remains too high for the central bank of Angola to slow the devaluation. Interest rates are at 19.50%, limiting much needed investment and economic stimulus due lack of inflation stability. Thus exchange transfer risk has come down to medium and sovereign non-payment risk remains medium high.

Burkina Faso (BFA)

Burkina Faso’s risk remains at a high level. Ibrahim Traoré is head of the military junta that leads the country and after Captain Traoré signed a new charter on July 2, the military junta will rule until at least 2029 (with elections planned this year no longer going ahead). Political violence and legal & regulatory risk remain very high. The security situation in Burkina Faso and surrounding areas remains extremely unstable as they have difficulties fighting off jihadist attacks, that have occurred over the last decade. In early June, over 100 soldiers were killed in an attack which has only heightened tension in the Sahel. Burkina Faso rank 185 out of 193 in the latest 2023/2024 UN Human Development Report as over 40% of the country’s population live in some form of poverty. In addition, earlier this year, Burkina Faso officially announced they were leaving the ECOWAS group after being suspended from the bloc. Thus, the risk of doing business is high. According to the IMF, real GDP will grow by 5.5% in 2024 and 5.8% in 2025. The services sector is growing and there is likely to be a boost to gold production (the country’s biggest export, which was halted due to conflict and insecurity in the country) as more mines open and benefits from higher gold prices are gained. This is contributing to the IMF estimating the current account (as a % of GDP) falling form -5.7% in 2024 to -4.1% in 2025. In addition, inflation has come down from a 2022 peak with the IMF forecasting it at 2.1% in 2024 and 2% in 2025 and beyond, put down by the limited economic activity in the country due to the security risks and tighter monetary policy. Higher interest rates are playing a part in a rise to government debt to GDP with an expected 63.3% this year and 63.4% in 2025, limiting urgent welfare and capital expenditure, contributing to a high risk rating for the government’s inability to provide fiscal stimulus and sovereign non-payment. Burkina Faso’s currency is the West African CFA Franc along with other West African nations, which is pegged to the euro, allowing banking sector vulnerability to remain at a medium level. However, the overall outlook is highly dependent on the security situation and conflicts not significantly worsening. 

Central African Republic (CAF)

Central African Republic’s risk remains very high. Faustin-Archange Touadéra remains president ahead of presidential and legislative elections set for 2025. Political violence and interference is deemed as very high as we continue to see levels of conflict in the region which have persisted for over a decade, particularly in the fight for control and exploitation of raw materials. The UN Mission is boosting presence in the country after recent conflicts between farmers and cattle owners over land (including a recent killing of 16 civilians in a village in the west of the country). Schools, hospitals and basic infrastructure in public services are so poor in the country, as the last decade of conflict has halted its development. As of January 2024, 2.8 million people need humanitarian assistance, which represents 46% of the total population. According to the IMF, real GDP is expected to grow modestly in coming years at 1.3% in 2024 and 1.7% in 2025. With poor infrastructure, human rights issues and a poorly-skilled labour force, the risk of doing business is still very high. On top of issues relating to conflict, climate change is proving to be a barrier to growth in the country with more extreme weather events, such as record flooding and droughts. Supply chain disruption is therefore deemed as very high. In addition, according to the IMF, government debt (as a % of GDP) will sit at 55.6% in 2024, which is expected to be accompanied by a slight fall to 54.4% in 2025. High amounts of debt is and will continue to restrict the government’s ability to provide fiscal stimulus with exchange transfer remaining medium high. However, this lack of investment will make social issues worse, by not investing in climate technologies which many have felt has exacerbated the violence. Central Africa Republic may need to lean on humanitarian aid but humanitarian donors seem to be ignoring the crisis with limited media coverage. Central African Republic’s current account deficit is expected to fall from -7.7% in 2024 to -6.7% in 2025. However, the country relies heavily on the agricultural sector which accounts for over half of its economy. With climate challenges, as seen in recent years, shortages of domestic food and fuel have driven up prices in the economy, but the fiscal constraints will make it very difficult for investments in climate technologies to overcome these issues in the long run. The Central African franc is pegged and directly indexed against the euro (EUR), where 1 EUR equals 655.96 CFA. With the EUR showing a weakening trend against the USD earlier this year, it has made issuing debt in dollars unfavourable and imports more expensive, once again hindering growth, reflected in sovereign non-payment being high.

Djibouti (DJI)

Djibouti’s overall risk level is high. Ismail Omar Guelleh is President of the country and has been since 1999. Political violence is medium high and political interference is high, with continued state dominance in the country. Their thriving ports (seen as the most efficient in Africa) close to the key Suez Canal and Red Sea is seen as a key driver of long-term growth – though Yemen Houthi attacks have impacted Suez Canal traffic. According to the IMF, Djibouti’s real GDP is expected to grow at a rate of 6.5% in 2024 and 6.0% in 2025. Djibouti continue to attract business from key players in the world economy such as US and China in ports, oil and gas terminals as well as a rail line. The government’s inability to provide fiscal stimulus has increased to medium high, with a government debt to GDP ratio projected to fall in coming years by the IMF, a drop from 56.5% in 2024 to 51.7% in 2025. In the long run, this falling debt ratio should allow Djibouti to issue more debt to bolster their ‘National Development Plan’. In additional, the World Bank portfolio in Djibouti is worth approximately USD 463 million in IDA financing and trust funds looking to further boost education, health and urban development in coming years. Exchange transfer also remains medium. However, the risk of doing business is still high and legal and regulatory risk very high. Djibouti still find themselves in a fragile geographical position with many of their neighbouring countries like Ethiopia, Somalia and particularly Yemen in the midst of devastating conflicts. In addition, supply chain disruption is medium high as there is a significant climate change risk. Their highly specialised economy and limited economic resources, means the country is struggling to diversify. Lots of rainfall is meaning reliance on imports for necessities like food, which remains a risk despite the IMF projecting a current account surplus of 5.1% this year and 4.0% next. This reliance on foreign markets will make Djibouti more vulnerable to downturns in these markets which will additionally halt access to capital, given that Djiboutian franc is also pegged against the USD.

Ethiopia (ETH)

Ethiopia’s overall country risk rating remains high, with political violence still very high.  Internal instability persists in the Amhara and Oromia regions, with no signs of resolution.  Separately, drought in Tigray is increasing risks to the fragile peace in the North. Externally tensions have been rising further with the Somali government, which in April expelled the Ethiopian ambassador and closed two consulates in protest against 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, although the Somali government remains weak and unable to control Somaliland. Turkey is trying to de-escalate the situation, but without success so far. This also means the political interference and supply chain disruption measures are high. On the economic front, the key news is the USD3.4bln 4-year agreement that has unlocked USD16.6bln of commitments from the World Bank.  Part of the deal includes a move to float the Ethiopian Birr. This will help relieve external pressure from low FX reserves and help debt restructuring talks.  However, Ethiopia requested haircuts on existing bond debt, which has surprised bond holders.  Given the still difficult debt backdrop, the sovereign non-payment risk has moved up from medium-high to high.  The 30% currency depreciation also makes it more difficult to control inflation, projected to be 25.6% by the IMF in 2024. Official lending commitments can help stabilise the currency, but inflation differentials will put pressure on the currency multi-year.  The IMF program is also designed to lift GDP growth, which is feasible given the population dividend is also a big tailwind.  The IMF forecasts growth at 6.2% in 2024.  

Gabon (GAB)

Gabon’s risk rating is medium high. Ali Bongo Ondimba was elected head of state in August 2023, however he was subject to a military coup after his controversial election win, with widespread belief of corruption and election fraud. General Brice Oligui Nguema leads the military junta in Gabon. Political interference and legal & regulatory risk is high; as widespread corruption persists. The transitional government has promised to open a ‘’national dialogue’’ to help form a new constitution. The country is currently suspended from the Economic Community of Central African States (ECCAS). In addition, as a country with high levels of poverty and a reliance on international support they are suffering, as since the coup the US have suspended foreign aid to Gabon. Supply chain disruption is medium high. The IMF expect real GDP to grow 2.9% this year and 2.7% in 2025. Gabon are a large producer of oil and have rich natural resources potential. According to the IMF, the current account surplus will be at 4% of GDP in 2024 and fall to 3% in 2025. Gabon export lots of their petroleum products to the US, however at the turn of the year, Gabon were suspended from the Africa Growth and Opportunity Act (AGOA) over human rights issues and US concerns about Gabon not making sufficient democratic progress. Countries in the AGOA benefit from no import duties on goods exported to the US. However, Gabon is aiming to transition to a greener future and diversify their economy and ultimately become less reliant on oil exports to grow. Government debt to GDP is predicted to be at 73.1% in 2024 and increase to 78.9% in 2025 as Gabon increase government expenditure as budget deficit continue to grow larger in coming years with expenditure required to reform and diversify the economy. Sovereign non-payment risk is now high. This is a major concern as more revenue will be used to service debt and limit longer term prospects to raise external finance, making the risk of doing business high. Gabon’s currency is the Central African CFA Franc, which is pegged to the euro, shared with Central African states in the Economic and Monetary Community of Central Africa. 

Mali (MLI)

Mali’s overall risk level remains high. Assimi Goïta remains interim president of Mali, after gaining power in the 2021 coup, with promised elections having been delayed further. Political violence remains very-high, as legal & regulatory risk and political interference remain high. The fight against al-Qaeda linked jihadist’s continues, with support now coming from Russia rather than France or UN. Anti-colonial views are producing a bias against French influence. Reports suggest 40 people were killed in central Mail in July. Meanwhile, though the military junta has allowed political parties activity to restart, domestic suppression persists. Growth is projected at 4.0% in 2024 according to the IMF. Mali’s economy is highly dependent on the agricultural sector, which accounts for 36% of the country’s GDP and employs 65% of the total population.  CPI is forecast to drop to 1.0% in 2024 and remains under control. Mali’s current account deficit is projected to be at a still large -5.1% of GDP in 2024, with a government debt/GDP ratio of 52.6%. Additionally, the withdrawal from the West Africa regional trade bloc will prove difficult for exports.  Thus, sovereign non-payment risk remains high, as exchange transfer risk remains medium high. Mali operates under the West African CFA franc, which is pegged to the Euro, but some in Mali having been pushing for an end to this arrangement. The risk of doing business remains medium high and the inability of government to provide fiscal stimulus remains high.

Niger (NER)

Niger remains a country with a high risk level. Abdourahamane Tchiani currently assumes the role as Head of State and has done since July 2023, since previous leader Mohamed Bazoum was overthrown in a military coup. Political violence is deemed as high and political interference medium high. Conflict remains prevalent in the Sahel as Niger alongside its neighbours in the region remain vulnerable to high levels of terror and violence from jihadist groups. In July, Niger’s defence ministry announced 15 soldiers were killed by armed militants. Niger used to have significant US military presence but this cooperation came to an end this year as influence from Russia grows in Niger. Over half of the population live in extreme poverty, and this number is expected to increase in coming years. Niger’s economy is not very diversified with huge dependence on agriculture. However, the climate crisis is affecting Niger with persistent impacts from droughts. This medium high supply chain disruption puts Niger at the risk of sudden changes in price. The IMF estimate 6.4% inflation in 2024 but falling to 4.6% in 2025. Inflation, despite showing signs of falling is worsening the problem of food accessibility in the country. According to the IMF, real GDP is going to grow significantly in 2024 to 10.4% and then by 6.1% in 2025, assuming security and climate issues don’t worsen and helped by oil production. The inability of the government to provide fiscal stimulus is deemed high and sovereign non-payment high. Government debt is forecasted to be 48.9% of Niger’s economy in 2024 and 47.4% in 2025 in the eyes of the IMF, making it difficult for the government to raise external finance resulting in cuts to public expenditure and halting the transition to be more climate resilient. Security and climate threats coincide to make the risk of doing business high and keep Niger and the Sahel region dependent on foreign aid (e.g.  a €201 million package announced by the EU for the Sahel). The current account deficit is forecast to be -5.1% of GDP in 2024 and -4.3% in 2025, a major improvement from past years as oil production ramps up. Niger is a country in the West African Economic and Monetary Union sharing the common currency of the West African CFA franc which is pegged to the euro, allowing banking sector vulnerability to remain at a medium risk level. 

Senegal (SEN)

Senegal’s overall risk level is medium high. Bassirou Diomaye Faye is now President after winning the 2024 legislative elections, just after being released from prison having being charged with defamation. Generally, history has shown that Senegal to be a stable democracy in Africa with peaceful changes of power despite protests this year as ex-President Macky Sall looked to delay the election by 10 months. President Faye has already proposed the fight against corruption as one of his major priorities. Legal & Regulatory Risk is medium and political interference is at a medium high level. Risk of doing business is at a medium high level as conflict, uncertainty and terror threats persist among their neighbours such as Mali. The IMF see Senegal as a very high growth economy in coming years with 8.3% real GDP growth expected this year and 10.2% in 2025. It is expected that hydrocarbons (oil and gas) will be a major growth driver in coming years as the country just opened their first offshore project which targets the production of 100,000 barrels of oil per day from the oil and gas field. On top of the oil and gas potential, Senegal’s economy has made clear efforts to diversify to aim to boost longer term investment and growth. For instance, in the transportation sector, the Ndayane deep-water port project and the PRAS project (the reconstruction of the five regional airports) are also both set to make Senegal more competitive and continue to increase FDI flows in coming years. All of which will help Senegal reduce their current account deficit which the IMF expect to fall from -8.9% of GDP this year to -4.8% in 2025. An issue facing Senegal is their high government debt (as a % of GDP) expected by the IMF at 72.5% in 2024 but projected to fall to 67.6% in 2025, as Senegal look to enter a period of fiscal consolidation, after difficulties in the pandemic and high levels of inflation which reached 9.7% in 2022 and is forecast to slow to 2% in 2025. Fuel subsidies are set to be cut and some tax increases meaning the IMF expect government revenue to increase in the coming years. The inability of the government to provide fiscal stimulus and sovereign non-payment risk are medium high. Senegal are part of the BCEAO and use the West African CFA Franc as their currency, which is pegged to the euro. But as newly-elected President Faye looks to begin a new era of sovereignty in Senegal, he will look at restructuring relations particularly with France which could mean moving Senegal away from the CFA Franc – which would risk exchange rate volatility. Banking sector vulnerability does remain at a medium risk level.

South Sudan (SDN)

South Sudan’s risk level remains very high as Salva Kiir Mayardit remains president as he has been since South Sudan gained independence from North Sudan in 2011. The first set of presidential elections are meant to be taking place in December, but fears over the credibility and preparation of the election looms. Jean-Pierre Lacroix, Under-Security-General for Peace Operations for the UN stated in March that, ‘’As things stand, South Sudan is not ready for elections’’ and there is a ‘’potential for violence with disastrous consequences’’. Political violence, political interference and legal & regulatory risk are all at a very high level, even as the nation aims to develop and transition since the end of the civil war in 2018. But, according to the IMF, real GDP is expected to grow in South Sudan at a rate of 5.6% in 2024 and 6.8% in 2025. South Sudan is an oil dependent economy and rely on oil to boost their exports. South Sudan operate a current account surplus and the IMF forecast that they will achieve a current account surplus (as a % of GDP) of 3.9% in 2024 and 5.7% in 2025. However, there is persisting conflict in neighbouring North Sudan, which is experiencing a severe humanitarian crisis. This is and will continue to directly affect South Sudan as North Sudan is the only route in which they can export their oil to international markets. Their reliance on oil makes the risk of doing business and supply chain disruption very high. Extreme weather like floods and droughts are also hindering development in infrastructure and human capital. This has caused the IMF to estimate inflation to be at 54.8% in 2024 but fall to 21.7% in 2025. The inability of the government to provide fiscal stimulus is deemed as very high as the nation continue to fiscally consolidate with high debt levels expected to keep falling with the IMF forecasting government debt (as a % of GDP) to be 48.3% in 2024 but fall to 42.1% in 2025. This will be damaging for South Sudan as there is an urgent need to invest to transition into a sustainable future, worsened by a medium high risk banking sector vulnerability and a high sovereign non-payment risk. The South Sudanese Pound is a free floating currency and continues to plunge against the USD, which comes as the Central Bank governor James Alic Garang said in May that foreign exchange reserves were also at an all-time low. As a result, exchange transfer is perceived as very high.

Sudan (SDN)

Sudan’s overall risk level remains very high. Abdel Fattah al-Burhan remains leader of Sudan and has been since the 2019 military coup. Political violence and political interference are both very high. Corruption and political tensions are high in Sudan as the civil war continues. The conflict between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) rages on. The formerly allies who helped to overthrow Omar al-Bashir in 2019 are now fighting over the control of the country after disagreements. This humanitarian crisis has said to have killed over 13,000 people and the UN estimate over 8 million people have had to abandon their homes. The conflict has had further, severe impacts such as the damage to infrastructure, epidemic outbreaks and issues relating to hunger. For instance, a World Health Organization (WHO) official said that there has been over 300 deaths from cholera in Sudan due to the humanitarian crisis brought about from the civil war. The risk of doing business is consequently very high. War has devastated the economy with IMF expecting -4.2% real GDP growth in 2024 and then an increase of 5.4% in 2025. Supply chain disruption is very high with constant damage to buildings and the agricultural sector (one of the largest sectors in the economy) has been severely weakened. The capital city of Sudan, Khartoum, is the hub of economic activity in Sudan, however this is where most of the conflict is taking place. Sudan’s economy is very dependent on the production of oil, but this is slowing as well due to the crisis. In addition, general government debt is expected to be 280.3% this year and 262.9% next year. Despite this fall, debt in Sudan is unsustainable and they will not have the capacity to repay and service this debt without significant debt relief. The average amongst low-income developing countries for 2025 is estimated to be 50% of GDP. Sovereign non-payment risk is high and the inability of the government to provide fiscal stimulus is very high. Inflation is anticipated to be 145.5% this year and 62.7% in 2025. Much of the outlook depends on progress in the conflict as supply shocks continue to impact prices in the economy, alongside the impact of US and EU sanctions on Sudanese firms. The US are attempting to be a mediator and have held talks with RSF representatives alongside Egypt to help push for a pathway towards peace talks and an end to the conflict of over a year and a half.

Tanzania (TZA)

Tanzania’s overall risk rating remains at medium high as President Samia Suluhu Hassan serves out the final year of her term ahead of the 2025 Presidential elections, which she is expected to win. Political interference is seen as high and political violence at a medium level. The government have made efforts to reduce economic and social inequality and boost literacy rates but 50% of the population continues to live in poverty. However, government spending is to be boosted by financial support from the IMF. In June, the IMF executive board approved funding of USD786.2 million of support to Tanzania to help tackle issues relating to climate change with USD149.4 million also dedicated to budget support, as they recognise Tanzanian authorities desire to continue to boost their economic recovery from COVID and achieve a level of macroeconomic stability. According to the IMF’s outlook, Tanzania’s budget deficit is forecasted to drop from -4.2% of GDP in 2024 to -3.6% next year in 2025. However, government debt remains moderately high with the IMF expecting it to be 46.1% this year, just below the 51.8% estimated average among low-income developing countries. Additionally, despite the budget deficit trend, Tanzania have the problem of having to spend around a third of its revenues servicing debt in a world of higher interest rates, which has had an impact in limiting their ability to issue new debt and spending more revenue to tackle the big issues such as climate change and poverty. In addition, Tanzania are a nation is heavily reliant on the export of minerals like gold and various crops such as maize (in which their supply can be disrupted by weather alongside poor infrastructure in areas) which we saw last year lead to inflationary pressures, reflecting a medium supply chain disruption risk rating and makes the risk of doing business high. However, their current account deficit is expected to close from -4.2% of GDP in 2024 to -3.6% in 2025 as they are expected to invest more in infrastructure such as road and rail networks to overcome these export logistic issues, particularly ahead of election year. According to the IMF, real GDP is projected to grow 5.5% this year and 6.0% in 2025 as economic growth continues to return to pre-pandemic levels. The central bank expects to see increased foreign exchange inflows mainly from tourism, gold, cash crops and food with exchange transfer at a medium level and banking-sector vulnerability at medium-low. In the long run, Tanzania will continue to aim for some form of economic stability and become a more attractive place for investors with strong international ties.

Togo (TGO)

Togo’s overall risk is high as Faure Essozimma Gnassingbe remains president. Political violence and political interference are at a high risk level. Togo have been a country constantly scrutinised for poor human rights records and claims of fraud at the top of government by the opposition. Earlier this year, Togo’s parliament gave final approval of a new constitution where Togo will move from a presidential to a parliamentary system. However, this has been faced with widespread criticism as many believe these reforms will remove limits on how long President Gnassingbe can stay in office. This would effectively allow him to stay in office until 2031. In addition, socially, there remains huge amounts of economic and social inequality, particularly between those living in rural areas compared to urban areas and for woman compared to men in terms of work opportunities and education. In addition, there is a persistence of instability in Western African countries like Togo with violence in neighbouring areas like the Sahel posing a security risk for the people of Togo. Therefore, the risk of doing business and supply chain disruption is high. According to the IMF, GDP is expected to grow at 5.3% in 2024 and at the same rate in 2025. This growth is largely explained by the increasing role of Togo as a trade hub for Sub-Saharan Africa. Togo is one of the world’s top producers of phosphates. According to the IMF, in 2024 Togo’s current account balance (as a % of GDP) will be -3.9% with the deficit expected to converge towards a balanced current account in future years. Furthermore, Togo has the highest human capital index (HCI) out of the UEMOA (The Western African Economic and Monetary Union), increasing Togo’s potential to experience economic progression. However, due to the COVID pandemic and the cost of living crisis, government debt to GDP has increased significantly. The estimates by the IMF show government debt to GDP will be at 68.3% this year but fall to 66.5% in 2025 as Togo enter a period of fiscal consolidation to reduce these high levels of debt. This high debt and need for fiscal tightening will reduce the ability to government to provide fiscal stimulus and makes the sovereign non-payment risk level high. Additionally, Togo remain in a position where they are extremely reliant on foreign aid. As previously mentioned, Togo is part of the UEMOA in which it shares their currency, the CFA Franc, with 13 other nations in Sub-Saharan Africa. The CFA is pegged to the EUR at a rate of 1EUR to 656CFA. However, Western African nations such as Togo do remain committed to implementing a new common currency, the ECO, to gain fiscal and monetary sovereignty from France by 2027- but limited progress has been made. Consequently, banking sector vulnerability remains at medium and exchange transfer high.

Tunisia (TUN)

Tunisia’s overall risk level is medium high. Kaïs Saïedis is President ahead of the October 6 elections. Political violence and interference are medium high as President Saïed is favourite to be re-elected with many opposition candidates in jail. In August, President Saïed sacked his Prime Minister Ahmed Hachani and replaced him with Social Affairs Minister Kamel Maddouri. Ahead of the election, the President has been active in repressing any opposition. For instance, in May, at least 10 journalists and lawyers were said to have been arrested. Amnesty International called it an ‘’unprecedented repressive clampdown’’. This authoritarian rule has led to low voting turnouts in Tunisia as opposition parties boycotted the parliamentary elections in December 2022. Migration also remains an issue in Tunisia. A large number of migrants from Sub-Saharan Africa have entered Tunisia, which has come at a significant financial cost. They are urging for increased international support to deal with this issue, despite receiving EUR 150 million from the EU in March. According to the IMF, real GDP is set to grow 1.9% this year and 1.8% in 2025. High inflation of 7.4% this year and 6.9% expected in 2025, is reducing private consumption in the economy and is reducing investment, alongside excessive regulation limiting external financing. Legal & regulatory risk is at a medium high level. Another factor limiting growth prospects is the threat of climate change. Last year’s drought emphasised this threat with impacts further worsened by the fact around 15% of the population work in the agricultural sector. Supply chain disruption is at a medium risk level. However, the big macroeconomic issue in Tunisia is the high government debt and the timing of its repayment. According to the IMF, government debt to GDP is expected to reach 78.6% this year and 79.5% in 2025, continuing its upwards trajectory. Over half of government debt matures between 2024 and 2026, causing concern in Tunisia. Sovereign non-payment risk is medium high and a bailout package with the IMF intended to be around USD1.9 billion has yet to be approved with the IMF demanding the reconstruction of government entities and cuts on public subsidises. The anti-democratic measures in Tunisia is damaging relations with the West worsening the prospect of much-needed aid to deal with both the debt and migration crises. The current account deficit is expected to worsen modestly from -3.5% of GDP this year to -3.7% in 2025. Tourism receipts are falling and a slowing Eurozone economy (Tunisia’s biggest exporter partners) is likely to put additional pressure on export-led growth in Tunisia and potentially the Tunisian Dinar but Tunisia are said to have sufficient foreign reserves to not trigger a balance of payments crisis.