Sub Sahara Africa: Country Risk Ratings

Cameroon (CMR)

Cameroon’s overall risk level remains medium high. At the age of 91, Paul Biya remains President as he has done since 1981. There has been much speculation about President Biya’s health as he has not been seen much in public recently. October saw the government take the unprecedented step in having to confirm that the President was alive and in good health after speculation over whether the President was dead.   Presidential elections are due in October 2025, after being pushed back by a year as questions about Biya’s succession continue against a rather powerless opposition. Political violence is high and legal & regulatory risk is very high. Cameroon is a country with high level of corruption and the threat of terrorist attacks from the Boko Haram group in the north of the country persist, with such attacks leading to the displacement of over a million people since 2017 according to the World Bank. There is a growing separationist movement from the Anglophone regions of Cameroon which border with Nigeria which seen increased violence from all sides. As a result, the risk of doing business remains high. In terms of the economy, the IMF forecast there has been 3.9% growth in real GDP for 2024 and project 4.2% growth in 2025. The Cameroon economy will continue to be supported by agricultural products and the natural gas sector. The current account deficit of -2.8% of GDP for 2024 is set to continue at -3.5% for 2025 due to a modest fall in exports expected. Government debt is on a downward trajectory as Cameroon have entered a position of fiscal consolidation. Debt to GDP will be 40.3% for 2024 and 38.3% in 2025. Despite this, investment remains solid as Cameroon increase their efforts to modernise and build better energy and transport infrastructure and become less dependent on highly volatile commodities. The inability of the government to provide fiscal stimulus is medium. Supply chain disruption is very high with disruptions due to violence and low human capital levels but also the increasing climate risk. Temperatures are rising and rainfall is becoming less certain making food insecurity and production in key sectors at risk because of increased extreme weather in Cameroon, highlighting the need to modernise the economy and boost human capital. Cameroon has the CFA Franc as their currency, pegged to the euro and the Bank of Central African States are yet to start to ease from a 5% policy rate after hikes in recent years, despite inflation easing and the IMF projecting price rises of 3.4% for 2025, significantly down from 7.3% in 2022. Exchange transfer risk is medium high whereas banking sector vulnerability is medium low.

Chad (TCD)

Chad’s overall risk is very high. Military leader, Mahamat Deby remains head of state after his dominant election victory in May, where he won 61% of the vote, in the first set of elections in military-led Africa. Second place candidate, Succes Masra however claimed the election victory was in fact stolen from the people, with another high profile opposing candidate being killed before the election. As a result, political interference and legal & regulatory risk are deemed as very high, reflecting the high levels of corruption in the Republic of Chad. President Deby, despite his resounding victory in May’s elections, continues to contend with opposition. Meanwhile, Chad are building stronger ties with Russia and the UAE away from the west. President Deby went to Moscow in early 2024 to meet Vladimir Putin with Russia looking to expand their military influence across Africa. Chad have also been receiving military support from the UAE. Another significant issue in Chad is the tensions across the border in Sudan, where conflict is continuing. Chad have received a large number of refugees fleeing war in Sudan. Chad and its neighbours are also continuing to attempt to combat the jihadist threat which has persisted in the Sahel region. The IMF estimate 3.2% growth by the end of 2024 and 3.8% in 2025. Growth is set to come from the expected increase in oil production and the impacts of oil prices still higher than pre-Ukraine/Russia war, a boost in public spending on defence and a revival in the cotton industry. However, supply chain disruption is at high rating from the ever increasing climate risk which has seen heavy floods recently affect 1.9 million people as the Logone river has reached its highest level in over 30 years. This, alongside the security risk from Sudan and extreme poverty hitting over a third of the population, is making the risk of doing business very high in Chad. However, IMF commitment to giving Chad access to Extended Credit Facility (ECF) support leaves the government’s inability to provide fiscal stimulus at a medium level in the hope that this support can bolster the country’s fiscal and balance of payments situations.

Congo Dem. Republic (COD)

The Democratic Republic of Congo’s overall risk remains very high. Félix Tshisekedi remains President after his controversial 2023 election victory which saw him re-elected in a poll filled with logistical issues in which some polling stations were opened late and issues with voting machines. The opposition believed that this was part of a plan to rig an election, where the turnout was just 43%. The biggest current issue for the DRC is the fight between the M23 rebels and DRC’s Armed Forces supported by the ‘patriots’ group for the control of the mineral-rich Goma region and there is intensified tension between DRC and Rwanda as well as the US, UN and EU feel Rwanda are supporting and fuelling the M23 attacks. Rwanda refuses to take responsibility for involvement. The conflict continues to be brutal, as the M23 have huge control in the city of Goma and are making the DRC lose out of key income from the minerals in the region. President Tshisekedi has urged the West to impose sanctions on Rwanda as the DRC continue to claim that Rwanda are holding back the signing of a peace agreement as a deal had been drawn out but Congo were not willing to sign a plan, they felt would not guarantee Rwandan disengagement. This conflict is worsening the problems of food insecurity, infrastructure development and poverty with more than 1.7 million people displaced due to the conflict, damaging one of the world’s poorest economies. In addition, earlier this year the defence and security forces in the DRC said they stopped an ‘’attempted coup d’état’’ in May led by foreign nationals. Furthermore, a massive problem for the DRC this year has been the Mpox epidemic becoming the most affected country by the disease in 2024. The risk of doing business thus remains high. The IMF forecast 4.7% growth for 2024 and 5.0% for 2025. The DRC have very high natural resource potential such as hydropower energy potential, copper and cobalt production and the benefits of the second biggest rainforest in the world. There are strong efforts to develop poor levels of infrastructure to attract business to the DRC as the project to build a modernised railway crossing the DRC, Zambia and Angola backed the US, EU and African Development Bank, which would boost exports and help balance the current account which the IMF project will fall from -4.0% of GDP to -2.0% of GDP from 2024 to 2025. A major issue in the DRC is inflation heightened by significant instability in the region. According to the IMF, price rises of 17.8% this year and 9.2% next year will reduce private consumption and investment and draw more people into poverty increasing pressure on a weak healthcare system constantly dealing with epidemic issues. Supply chain disruption is very high, an issue exacerbated by the increased climate risk, conflict and weak resources not sufficient to deal with crisis.

Congo (COG)

Congo’s overall risk level is high. Denis Sassou Nguesso remains President after a 2021 election victory, a post he first took up in 1979. Anatole Collinet Makosso has lead the government as Prime Minister since 2021. Climate change is a major issue in the Republic of Congo, a country with a large area of tropical peatlands. The end of 2023 and start of 2024 saw unprecedented flooding where 17 people were reported to have lost their life and more than 320,000 people affected. Another issue central to Congo and its government is poverty. Congo’s human capital index is extremely low at 0.42 and there are significant challenges for some who can’t get access to clean water or sufficient levels of healthcare and education. In rural areas, only 46% have access to clean water. The IMF estimate 2.8% growth for 2024 and 3.7% in 2025. Congo is the third biggest oil producer in Sub Saharan Africa and the oil sector takes up half of the economy. Oil revenues, fuel subsidy reform and debt restructuring deals to improve debt sustainability can be attributed to a modest improvement in government debt falling from 93.3% of GDP in 2024 to 89% in 2025. However, oil price volatility and high supply chain disruption will keep debt levels elevated despite a small improvement. As such, the inability of the government to provide fiscal stimulus and sovereign non-payment risk are both high. Inflation anticipated by the IMF to be at 4% this year and 3.6% in 2025 with higher fuel prices in the past year as well as reform to the fuel subsidy. Congo’s currency is Central African Franc, CFA, which is pegged to the euro. Exchange transfer risk is medium high and banking sector vulnerability is at a medium level. High levels of poverty and corruption, poor infrastructure and human capital as well as being in the midst of continued climate issues make the risk of doing business very high in Congo.

Cote d’Ivoire (CIV)

Cote d’Ivoire’s overall risk level remains medium high. Alassane Ouatara remains president ahead of 2025’s presidential elections. Political violence and legal & regulatory risk are both medium high. Within the country, there is a relatively stable political scene. The ruling party, RHDP, continue to have support having retuned strong results in 2023’s municipal elections, however ahead of next year’s presidential elections there are questions beginning to arise over President Ouatara’s age as he turns 83 in 2025. Cote d’Ivoire do however have to deal with the issue of regional instability. Tensions in neighbouring Mali, Guinea and particularly Burkina Faso who are currently under military rule persist. Jihadist violence close to their border with Burkina Faso has resulted in a huge influx of migrants moving over the border, but so far the Ivory Coast have been able to defend themselves against threats as serious as those facing other neighbouring countries. The Ivory Coast have been the second fastest growing economy in Africa in the last decade. Growth is expected to remain resilient with the IMF projecting 6.5% in 2024 and 6.4% in 2025. The oil and hydrocarbon boost will support the economy with new field discoveries set to increase oil reserve potential by around 25%. Cocoa, nuts, gold and cotton exports should also reduce the current account deficit, expected to fall from -5.4% of GDP in 2024 to -1.3% of GDP in 2025. Climate risk is however becoming an increasing issue in the Ivory Coast as this year the agricultural sector has been severely affected by the impacts of the El Nino droughts and lack of rainfall predictability. Cocoa output has dropped but the Ivory Coast have benefitted from higher prices. Supply chain disruption is medium. Government debt is set to fall from 59.3% of GDP in 2024 to 55.9% of GDP in 2025, as support from IMF funded support up to USD4.8 bn from 2023-2026.  This has helped the country’s business climate to reform and tax reforms have supported the National Development Plan seeking to improve infrastructure, like a stronger electricity grid and better transport in the city of Abidjan. The Ivory Coast can also benefit from lower costs of financing which saw them in early 2024 become the first African nation to go back into financial markets and issue two new Eurobonds, helping to manage debt and decrease liquidity pressure. Currently, the inability of the government to provide fiscal stimulus is medium high. 3.8% inflation for 2024 and 3.0% for 2025 reflects monetary stability in the Ivory Coast who are part of the West African Monetary and Economic Union. Exchange transfer risk is medium high.

Equatorial Guinea (GNQ)

Equatorial Guinea’s risk level is high. Teodoro Obiang Nguema’s, leader since 1979, is in his sixth term as President. In August, he appointed Manuel Osa Nsue as Prime Minister after the previous government was removed for being unable to tackle the key economic and social issues in the country. In 2023, the European Parliament urged EU members to demand an end to political persecution in Equatorial Guinea. The ruling party, the PDGE, have total control in Equatorial Guinea as they control the Chamber of Deputies and the Senate. Political interference and legal & regulatory risk are both very high as high levels of corruption and government repression of dissent persist. Equatorial Guinea’s economy is oil rich and dependent on oil. The economy has struggled in recent years, having contracted in the past decade as oil reserves have been diminishing. Poor governance and a volatile business make the risk of doing business very high. The IMF anticipate real GDP to grow by 5.8% in 2024 but contract by -4.8% in 2025, likely to be brought about by falling hydrocarbon production and poor demand in this weakly diversified non-oil economy. Average prices are expected to have increased by 4% in 2024 and then by 2.8% in 2025 with Equatorial Guinea reducing some import tariffs and customs duties, however households are still feeling the effects of significant food inflation in recent years with the national institute of statistics indicating a 7.1% increase in prices of food products between March 2020 and September 2023. Falling hydrocarbon production will also impact government revenues and government debt to GDP will increase modestly from 35.1% of GDP in 2024 and 35.6% in 2025 according to the IMF. The inability of the government to provide fiscal stimulus and sovereign non-payment risk are both at a medium high level. Equatorial Guinea operate as one of the countries who use the Central CFA franc as their currency pegged to the euro with the Bank of Central African States’ policy rate remaining restrictive at 5% as it has done since it was increased in April 2023.

Eritrea (ERI)

Eritrea’s risk level remains at a very high level. Isais Afwerki continues as President as he has done since 1993 in the one-party state. Political violence is high and political interference very high. Corruption remains at high levels and concerns over human right issues are also still present from Amnesty International in a country which remains highly militarised since 2018 and the end of years of conflict with Ethiopia. Tensions do however remain amongst neighbours despite efforts to rebuild them post-2018. There is conflict across the Red Sea in Yemen and potential of more disruption in the Red Sea from Houthis attacks on container ships. To overcome this, Somaliland and Ethiopia agreed to lease Ethiopia some of its coastline, which is also hoped to reduce the chance of future conflict between Eritrea and Ethiopia as Ethiopia lost their ports to Eritrea in the 1990s and the potential of further force to regain access to the Red Sea remains. As a result, the risk of doing business is very high. Eritrea’s agricultural dependent economy, representing around a third of the economy, continues to provide a very volatile economic landscape as supply chain disruption is at a medium high level, in part due to high risk of inflationary pressures. According to the African Development Bank, in 2024 real GDP will have grown by 2.9% and 3.1% in 2025 as particular sectors such as mining continues to expand production, boost employment and income and as a result private consumption. However, poverty rates in Eritrea remain some of the highest in Africa (despite modest improvements) and an increased proportion of people are fleeing the country to Europe, limiting longer term growth potential. In addition, extremely high levels of public debt have meant a period of fiscal consolidation and a reduction in capital expansion. Military and political priorities are continuing to hold back private investment as state-controlled companies crowd out external financing. Despite policy efforts such as free zones including in the port city of Massawa. Debt analysis has not been completed in public since 2019, when it hit 260.4% of GDP, according to the IMF. The inability of the government to provide fiscal stimulus and sovereign non-payment risk are both high. The Nafka remains pegged to the USD at 1USD to NFK15, which is a future instability risk. 

Ethiopia (ETH)

Ethiopia’s overall country risk rating remains high, with political violence still very high. Externally tensions with the Somali government remain high, given Ethiopia previously signed an MOU with Somaliland to lease a port and build a military facility on the Red Sea. Tension with Egypt has also escalated in recent months over cooperation between Egypt and Somalia and Egypt’s concerns that their water supplies will be impacted by the construction of the Grand Ethiopian Renaissance Dam. Turkey is trying to de-escalate the situation, but without success so far. Internal instability also persists in the Amhara region, with reports of renewed violence in early November.  Separately, drought in Tigray earlier this year continues to risk the fragile peace in the North. This all means the political interference and supply chain disruption measures are high. On the economic front, the key news is the USD3.4bln IMF 4-year agreement that has been followed by structural reforms and GDP growth is set to accelerate to 6.5% in 2025.  However, the ongoing large currency depreciation also makes it more difficult to control inflation, projected to be 23.9% by the IMF in 2025. Official lending commitments can help slow the currency decline, but inflation differentials will put pressure on the currency multi-year.  Given the still difficult debt backdrop, the sovereign non-payment risk has remained at medium high.

Ghana (GHA)

Ghana’s overall risk level has increased from medium to medium high. On the 7 December, Ghanaians will go to the polls and vote for their president and parliament. It is widely expected that the elections will be fair with Ghana having a stable political scene and previous elections have seen a generally smooth transition of power. Political interference and legal & regulatory risk are both deemed medium. Current President Nana Akufo-Addo will finish his second and final term as president and the election is set to be a hotly contested one between current vice-president Mahamuda Bawumia and the incumbent NPP party up against former president John Mahama and the social democratic National Democratic congress party. Ghana however has geopolitical risk lingering in the background with the threat of jihadist attacks coming from neighbouring countries such as Burkina Faso and Mali so insecurity persists. The IMF forecast moderate growth of 3.1% in 2024 and 4.4% in 2025. Growth is set to be supported by the oil and gas industry and gold mining. However, holding back the economy and a huge challenge for President Akufo-Addo’s administration has been macroeconomic instability. Ghana has recently announced that it will exit debt default, having agreed a restructuring deal with bondholders’ worth over USD13 bln . Most bondholders have agreed to exchange their bonds for new debt worth USD 4.7 bln less. Debt currently at around 82.4% of GDP is set to fall as a result in the coming years. Sovereign non-payment and exchange rate risk are both deemed medium high. Inflation is also very high with a 19.5% price rise in 2024 expected to fall to 11.5% in 2025. This is progress from 39.2% price rises in 2023. The inflation issue is increasing food insecurity and poverty with food prices still very high and a depreciating currency are all making the risk of doing business medium high. In addition, banking sector vulnerability is medium low, however the sector remains fragile, with non-performing loans hitting nearly 25% for 2024 and high interest rates with the policy rate currently at 27%.

Guinea (GIN)

Guinea’s overall risk level remains high. Lt Col Mamady Doumbouya remains head of the military-led government in Guinea, after the special forces overthrew previous president Alpha Conde in 2021. After seizing power, the military junta agreed with the Economic Community of West African States group that they were would rule for a two-year transitional period leading to an election. However, there have been very few signs of this and as a result there is widespread public anger. In November, the Forces Vives, an opposition group in Guinea, called for Guinea to be under civilian rule once again by the 1 January 2025. A ECOWAS delegate did meet with the government in September and the military-lad junta remained committed to following through with the transition period as they sort out a reliable electoral register but expressed their need for financial support. Following the coup d’état, Guinea were banned from the ECOWAS and members of the government are under sanctions from the organisation. Political violence, political interference and legal & regulatory risk are all at high levels. It is likely any sort of elections for 2025 will be postponed and the public are struggling to access essential public services. However, any public demonstrations in opposition and strict media control makes it harder for the population to voice their concerns. As for the economy, the IMF forecast 5.1% economic growth for 2025 after 4.1% in 2024. Guinea remains to have strong natural resource potential, agriculture and mining exports are supporting robust growth, however are not being fully exploited due to weak governance. As a result, the current account deficit is expected to modestly fall to -8.8% of GDP in 2025 from -9.5% in 2024. Increased FDI is also having a positive balance of payments effect, mining company Rio Tinto have begun work on a 670km railway through Guinea connecting the Atlantic coast with the Simadou iron-ore deposit. Inflation is a major issue still Guinea with 10.2% inflation expected for 2025. This is halting private consumption and puts pressure on issues such as food insecurity in the country. Exchange transfer risk does remain medium high. Climate change is another major issue as Guinea remain one of the most vulnerable countries to its impacts. The countries are very forested and a UN report showed that farmers’ practices are not sustainable at present and the country are at heightened risk of floods, droughts and landslides. The problem worsened by unsustainable deforestation in the country. USD 8.85 million of supported has been granted by the UN over five years to promote sustainable farming practices and make the country more climate resilient with the agricultural sector being so key in its economy. Supply chain disruption and the risk of doing business are thus medium high.

Liberia (LBR)

Liberia’s overall risk remains high. Joseph Boakai is President, having defeated George Weah in the 2023 presidential election, however the new President is ruling without a parliamentary majority, as he seeks to offer a fresh start for the Western African nation still suffering from the effects of recent health crises and high levels of corruption and poverty within the country. Political violence is a medium high rating and political interference high. Growth is projected by the IMF at 5.1% in 2024 and 5.8% in 2025, driven by the mining sector. Gold and iron ore production are increasing through ArcelorMittal’s expansion in the region. This is boosting transport links and decreasing current account deficits, particularly with the increases in gold prices in the past year. There is also a big agricultural sector in Liberia.  Supply chain disruption is medium high, with a growing risk of extreme weather patterns. But ultimately this makes Liberia very dependent on changes in commodity prices in the global economy, all together making the risk of doing business very high. In addition, the IMF just approved USD210 million worth of support to aid the new President promote institutional reform and provide macroeconomic support, particularly as he has outlined his objective of improving currently poor infrastructure in Liberia. This modest support package of fiscal stimulus comes as the inability of the government to provide fiscal stimulus is medium high with fiscal consolidation policies in recent years required to control debt which the IMF forecast to slightly deteriorate from 56.8% of GDP in 2024 to 57.2% in 2025. A big issue facing Liberia however is inflation. The IMF projects 7.7% in 2024 and to 6.0% in 2025. Higher prices have affected private consumption and investment, coinciding with higher interest rates, currently at 17.5%. Banking sector vulnerability is currently at a medium high level, with the capital adequacy ratio at 21.2% and a recent fall in non-performing loans from 16.2% to 11.2%, according to the World Bank. However, the Liberian economy remains very dollarized with both the LRD and USD accepted as legal tender, continuing to restrict the CBL’s ability to implement influential monetary policy. Consequently, exchange transfer risk remains at a medium level. 

Libya (LBY)

Libya’s overall risk remains very high. Abdul Hamid Dbeibeh remains the internationally recognised Prime Minister in his Government of National Unity party (GNU), based in Tripoli in the west of the country. The east and the west of the country have remained divided since the end of the civil war in 2020. In the east, the Government of National Stability (GNS) was set up headed by Prime Minister Oussama Hammad, supported internationally by the likes of Russia and Egypt. This divide continues to pose many challenges for Libya with regard to the distribution of income and control. The faction was particularly highlighted when earlier this year, when the east and west could not agree on a governor for the central bank, eventually requiring UN interference to arrange an agreement between both sides with the nomination of a temporary governor. This came after previous and long-time central bank governor Sadiq al-Kabir was dismissed by the President of Libya’s Presidential Council, who is aligned with the Tripoli government. This caused fury in the east and the economy completely halted in this period. Political violence, political interference and legal & regulatory risk are all very high. Libya is a country severely affecting by climate change and its impacts. 2023’s storm which killed thousands of Libyans was made 50 times more likely and the implications were significantly worsened by people’s increased vulnerability brought on due to years’ conflict, a World Weather Attribution Group study found. Supply chain disruption and the risk of doing business are both very high. Poverty levels in Libya are very high and the access to water sources continues to be a major issue. According to the IMF, the economy will grow by 2.4% in 2024 and 13.7% in 2025. After years of political crisis and the effects of last year’s floods, oil production will once again power growth in the Libyan economy and after years of war have passed, more foreign oil companies will set up operations in Libya. In October, Libya said it would resume full oil production returning to around 700,000 barrels of crude oil a day. This oil trade surplus has allowed the IMF to forecast a current account surplus of 11.1% of GDP and 12.5% of GDP in 2025 and is set to reduce national debt in the long term through increased oil revenues, leading to expected budget surpluses in coming years. The inability of the government to provide fiscal stimulus has increased to high but sovereign non-payment risk remains medium high for now.

Mauritania (MRT)

Mauritania’s overall risk level is high. Mohamed Ould Ghazouani was re-elected as President in June, taking over 56% of the vote. However, the result didn’t come without any opposition, including second place candidate, Biram Dah Abeid claiming that the election was rigged. In addition, it was reported that three people died in detention having protested after the conclusion of the elections where a number of protestors were also arrested. Political interference is high and legal & regulatory risk is very high. Situated in the Sahel, Mauritania have seen military takeovers in neighbouring countries including Mali, Burkina Faso and Niger leading to an increase of refugees from these countries. These geographical risks coupled with domestic issues including a high poverty rate still feeling the repercussions of the COVID pandemic and the continued existence of slavery in the country. Consequently, the risk of doing business is high. Growth is forecast to reach 4.4% in 2024 and 4.2% in 2025 by the IMF. Mauritania is launching their gas production alongside neighbours Senegal in the Grand Tortue Ahmeyim project and gold production is benefitting from higher gold prices. This expansion in gas production will allow Mauritania to boost exports. The current account deficit is estimated to be -7.2% of GDP in 2024 but close to -8.7% in 2025. In addition, this deficit is mainly covered through FDI, as more foreign partners look to utilise Mauritania’s significant energy potential in gas, wind as well as solar. For example, German company Conjucta and energy company Infinity Power agreed a deal to produce green hydrogen in Mauritania. This is boosting international support and corporation, including from the IMF and the Extended Credit Facility (ECF). 2022’s 9.6% level of inflation has been brought down to a projected 2.7% in 2024 but the IMF estimate prices will increase by 4.0% in 2025. In addition, government debt is expected to slightly increase from 44.2% of GDP in 2024 to 46.2% in 2025. The inability of the government to provide fiscal stimulus is therefore at a medium level. Mauritania is however continuing to be severely affected by natural disasters with thousands of hectares of land lost each year and harvests becoming increasingly threatened. Supply chain disruption is at a medium high level.

Rwanda (RWA)

Rwanda’s overall risk level is medium. Paul Kagame remains President of Rwanda after his landslide election victory in 2024, where he took 99 percent of the vote. The election completely underlined his control over Rwanda in the country that he has been President for since 2000. However, he faced very limited opposition with some key potential presidential candidates banned. The new Labour Government in the UK has scrapped the previous plan introduced by the previous Conservative government, which would have seen immigrants seeking asylum in the UK to be sent to Rwanda. Meanwhile, the Mpox virus has hit areas of Rwanda, but they were the first country to administer vaccinations to deal with the public health emergency in Africa, with these vaccinations having been particularly effect in the most impacted areas. According to the IMF, real GDP will grow by 7.0% in 2024 and a further 6.5% in 2025. Rwanda is pursuing a policy of developing into an upper-middle income economy by 2035 and a high income economy by 2050 in their ‘Vision 2050’. This has prompted ‘National Strategies for Transformation’ boosting both public and private investment in green energy projects, infrastructure, education and health. However, the government’s inability to provide fiscal stimulus is at a medium high level. Rwanda is a country being affected by the impacts of climate change. In the past 2 years, floods have particularly hit the country hard, which has halted the agricultural sector significantly. This has led to increased need of public expenditure on flood defence in efforts to become more resilient to these extreme weather patterns. General gross government debt is set to worsen from 71.4% of GDP in 2024 to 73.3% in 2025. However, access to additional finance from the IMF under Resilience and Sustainability Facility (RSF) and Stand-by Credit Facility (SCF) has been of significant help. Meanwhile, there is an additional dependence on agricultural imports due to the climate risk but increased export potential from lithium mining and exploration. Rwanda has signed a breakthrough deal with Australian mining company Rio Tinto and has resulted in the IMF estimating a fall in the current account deficit from -12.0% of GDP in 2024 to -11.0% in 2025. Falling inflation of 4.9% this year and 5.1% in 2025, back between the Central Bank of Rwanda’s target range of 2-8%, could see less restrictive monetary policy in 2025 and a further boost to private consumption and investment. The risk of doing business is at a medium level. The Rwandan Franc has also continued to depreciate against the USD in the past 18 months. Exchange transfer and banking sector vulnerability remain at a medium level of risk.  

Somalia (SOM)

Somalia’s overall risk level is very high. Hassan Sheikh Mohamud is President after being elected once again in 2022. Political interference and legal & regulatory risk are both at a very high level. Sunni Islamic group in Somalia, Al Shabaab, continue to act as a threat to Somalia. At the end of September, at least 6 people were killed and others injured from a bomb attack in Mogadishu and these types of attacks do remain frequent. In addition, relations with neighbours also remain tense. For instance, tensions persist between Somalia and Ethiopia over the recent agreement of the Somaliland-Ethiopia port deal, involving the plan for some of the Red Sea coastline to be leased to Ethiopia in return for the formal sovereign recognition of Somaliland, who broke away from Somalia in 1991. This has led to anger from the side of Somalia. Ethiopia, who have many troops in Somalia to help protect the Horn of Africa against the jihadist threat, have been threatened with the possibility of these being expelled if this port deal is pursued. Debt issues have recently been offered a major boost as Somalia are now part of the Heavily Indebted Poor Countries Initiative, where they have received USD4.5 billion worth of debt savings and more access to fundamental financial resources from the IMF and World Bank. Exchange transfer and banking sector vulnerability remain at a medium level.  As a result, the IMF estimate a more optimistic growth outlook at 4.0% in 2024 and 2025. Meanwhile, supply chain disruption is very high.  It is estimated that two thirds of the Somalian population rely on the agricultural sector for the majority of their income. 2022 saw a record drought hit Somalia and 2023 saw floods that led to a number of fatalities, many more being displaced, the loss of livestock, all of which drawing more people into poverty. The UN estimated that 1.5 million children below the age of 5 are acutely malnourished. But planned investment into education, energy and health are looking to allow them to become more resistant to potential future shocks and speed up urbanization in their agricultural dominant economy. This should help control inflationary risks in the future, in which the IMF estimate will fall in coming years from 5.0% in 2024 to 4.2% in 2025. However, these issues are coinciding with decades of conflicts making the need for international aid and support even more vital for the development prospects of the Somalian economy and people. Only just over a third of the working age population participate in the labour force, and still many jobs are of low productivity and pay. Altogether, making the risk of doing business very high in one of the poorest countries in the world.

South Africa (ZAF)

South Africa’s overall risk score remains at medium, with no changes in any of risk levels in this reporting period. First, the risk of political violence remains high due to high income inequality, poverty and corruption. Structural risks such as high unemployment and logistics bottlenecks remain strong although power supply constraints continue to ease. After the ruling African National Congress (ANC) lost its majority in the general and presidential elections late May, and ANC and Democratic Alliance (DA) formed a coalition government of national unity (GNU) with the ANC-lead, the political interference risk is at medium-high rating. The country is currently governed by a coalition for the first time in its history and there are still some concerns on the functioning of the GNU. The coalition saw the first real friction over the education bill in September, in addition to the recent clash over the national health insurance, which cause legal and regulatory risks to remain at medium level as uncertainties continue to persist. On the economic front, despite problems such as declining real per capita growth, rising level of public debt and high unemployment remain significant, the macroeconomic outlook continues to improve. October CPI reading (2.8% YoY) was below the mid-point of target band of 3% - 6% and load shedding has been suspended for 233 days as of November 15. The ease of doing business, which remains at medium-high, is helped by the suspended power cuts, falling inflation and improving economic environment. The start of a monetary easing cycle in September continues with pace, as SARB cut the key rate to 7.75% on November 21 which will likely bolster growth in private-sector credit uptake. Capital buffers are sound, enabling banks to withstand shocks as banking sector vulnerability remains at medium-low, demonstrating the relative strength of the financial sector. The economic outlook is positive on the back of improved investor sentiment, sustained electricity generation, and falling inflation. However, the budget deficit continues to widen keeping the public debt/GDP ratio high relative to peer sovereigns.  The ZAR could be volatile in 2025 on the face of a resurgent USD as fear U.S. overheating and tariffs under President Trump.

Uganda (UGA)

Uganda’s overall risk is medium high. Yoweri Museveni remains President as he has done since 1986. Political violence and interference as well as legal & regulatory risk are all high. Uganda has to deal with the geopolitical threat with regional conflicts in neighbouring South Sudan and the Democratic Republic of Congo. Tensions persist on the Congolese border as lots of refugees from DRC continue to come to Uganda to escape violence, this included nearly 100 police officers who were returned to DRC in August after escaping the violence between M23 rebels and DRC’s military. In addition, poverty levels remain high with over 40% of the population earning less than USD 2.15 per day. Moreover, corruption is an issue in Uganda which has led to protests occurring and has been met by force from the government. Overall, the risk of doing business is high. The IMF forecast 5.9% growth in real GDP in 2024 and 7.5% growth in 2025. Growth will be enhanced by the production of crude oil allowing an increase in FDI reaching USD 2.3 billion in the first nine months of FY24, according to the World Bank. Uganda’s Finance Minister, Matia Kasaija has already revealed his plans to issue new oil and gas licences with the aim of once again boosting FDI and growth prospects in the coming years. This is expected to reduce the current account deficit from -6.6% of GDP in 2024 and 2025 to -2.2% in 2026. A remaining issue however for Uganda is public debt. According to the IMF, government debt to GDP will reach 51.4% in 2024. However, the finance ministry has said that the government plans to slash spending by over 20% and domestic borrowing by over 50% in 2025-26. Concerns over debt in the country were heightened as Fitch and Moody dropped Uganda’s sovereign risk ratings and as public borrowing rose sharply during the pandemic. Sovereign non-payment risk is rated as medium high. However, Uganda will continue to benefit from foreign aid, such as USD 600 million worth of aid from the World Bank and French Development Agency (AFD) to fund infrastructure, as well as an IMF Extended Facility Agreement. The Bank of Uganda has once again started easing their policy rate after initially cutting interest rates in August 2023 only to increase them in March and April to support the depreciating Ugandan Shilling, which has appreciated since as a result of higher rates. Inflation is back at the 5% target and projected to be 3.5% in 2024 to 4.4% in 2025, according to the IMF, as economic activity is expected to rise sharply. To fully take advantage of the incoming oil boom, the government will have to invest more in human capital as many still live under the poverty line in Uganda and need to be moved into productive areas in the economy. Supply chain disruption is medium high as Uganda become more vulnerable to extreme weather events such as droughts and floods, particularly affecting the agricultural sector, as well as the lack of strong infrastructure and human capital to adapt to crisis. Exchange risk and banking sector vulnerability are both medium low.

Zambia (ZMB)

Zambia’s overall risk remains at a medium high level. Hakainde Hichilema is President as he has been since 2021. Political violence and legal & regulatory risk are both at a medium high level. The main issue for Zambia remains its debt restructuring after defaulting in 2020 off the back of the COVID pandemic and the prior surge in debt. It has been reported that Zambia are now in the exit phase of its default on its debt with the majority of their USD Eurobond holders agreeing to a long term debt restructuring plan, with China being the main creditor. Zambia have been under pressure to formally finalise any restructuring to continue the IMF bailout of USD 1.3 bln. The inability of the government to provide fiscal stimulus is now high and sovereign non-payment remains at a high level. The IMF anticipate 2.3% real GDP growth in 2024 and 6.6% in 2025. Mainly due to the increasing potential in copper production, with 2 big mines being privatised, including Vedanta Resources’ USD246 Mln buyout of Zambia’s biggest copper mine, KCL. However, slowing China demand may dampen down copper demand in the short term, but the world’s determination for a clean energy transition could aid copper prices and see Zambia seek its benefits in the long run. The current account deficit of -0.2% in 2024 is expected to move into surplus in 2025- due to a decrease in imports. Meanwhile, there is a clearer climate risk in Zambia as the country have faced severe droughts, heightened by El Nino and due to this President Hichilema has claimed that Zambia has lost half of their planted area. More of the population has subsequently been brought into poverty and more pressure has been once again put on public finances. The risk of doing business is at a medium high level. In addition, the Zambian Kwacha remains at weaker levels against the USD with the Central Bank of Zambia interest rates now at 13.5%, but the depreciation has slowed. The fiscal consolidation measures and tighter monetary policy should also allow inflation of 14.6% (IMF estimates) in 2024 to modestly fall to 12.1% in 2025, however this remains a major issue for the Zambian economy and its people. Exchange transfer risk remains at a medium high level.

Zimbabwe (ZWE)

Zimbabwe’s overall risk remains very high. Emmerson Mnangagwa remains President after winning re-election having also secured a parliamentary majority in 2023’s elections, the result not accepted by opposition. Political interference is high and legal & regulatory risk is very high. Relations with the West remain tense. The US and Europe have imposed sanctions against many key figures in Zimbabwe including the President and his wife for alleged corruption and human rights abuses. Poverty levels remain high but the government do aim to make Zimbabwe an upper-middle income country by 2030. Zimbabwe have strong potential and comparative advantage in natural resources such as mining and agricultural sector alongside a highly educated workforce. According to the IMF, real GDP will grow by 6% in 2025 after a lower figure of 2% in 2024 due to macroeconomic shocks, heavy droughts and lower export gains with lower mining prices. Zimbabwe have high government debt to GDP at 70.3% in 2024 but is expected by the IMF to fall to 58% in 2025. Zimbabwe also have a significant pile up of around USD21 billion worth of defaulted debt and are in negotiations with holders over restructuring deals. However earlier in 2024, China wrote off an undisclosed amount of interest free debt from Zimbabwe which gives them some more headroom. The inability of the government to provide fiscal stimulus is very high and sovereign non-payment risk has increased too very high. This year has seen Zimbabwe introduce a new gold-backed currency, the ZiG, after the collapse of its local dollar after years of monetary instability. Governor of the Central Bank, John Mushayavanhu, admitted that money printing wrecked the value of the dollar which was only introduced 5 years prior. Zimbabwe will hope this will bring stability in the face of their hyperinflation crisis. The average increase in consumer prices has been 635.7% in 2024 but set to gradually fall with 23.6% inflation expected by the IMF next year. The hyperinflation crisis has significantly damaged the economy, bringing more into poverty and having a significant negative impact on private consumption as well as investment. The risk of doing business is thus very high. This risk is also exacerbated by the impacts of the climate crisis in Zimbabwe. The El-Nino climate crisis caused droughts and have halted the industrial sector this year. This alongside a very poor electricity supply in the country discourages FDI, reflecting a medium high supply chain disruption risk.