EXX Africa assesses the outlook for six major African sovereigns at risk of debt distress, according to the IMF and ratings agency Moody’s. Our assessment is sometimes at odds with these institutions’ rankings, as some countries are making steady improvements in their debt position whereas others are facing critical debt servicing pressure.
Angola’s beleaguered government has been hoping for greater US support for targeted sanctions to support its anti-corruption campaign and fresh US oil investments as an alternative to unsustainable Chinese project finance. Disappointed on both fronts, Angola will now be forced to accept painful IMF-endorsed austerity or sell off its most valuable oil assets to avoid debt servicing distress.
In less than six months, Africa is scheduled to launch the world’s largest free trade area, bringing together an estimated 1.2 billion people from states with a combined GDP of around USD 3 trillion. EXX Africa examines the progress to date in reaching the agreement and the opportunities and challenges associated with launching this milestone.
Two large African economies are forecast to mark a significant improvement in their country risk ratings in 2020, while at least three West African markets will face a severe deterioration in their political risk indicators. EXX Africa identifies key risk trends for the year ahead and shares our selection of potential country risk winners and losers from around the continent for the year ahead.
In 2019, Benin has captured headlines focussed on its trade dispute with Nigeria and a political dispute with the opposition. EXX Africa has conducted a comprehensive review of the political, economic, and security risks facing the country. Based on the findings of this report, EXX Africa considers Benin to be a paradigm for improving country risk in Africa based on the current government’s concrete steps to mitigate the remaining risks and overcome prevalent challenges.
Pressure is mounting on the Nigerian government to lift trade restrictions with Benin and Niger as food prices rise in cities and protests ignite in border regions. The economy’s sluggish growth, accelerating inflation, and weak revenue collection, including from the oil sector that is suffering from a spree of vandalism attacks, pose further risk for the implementation of the 2020 budget and the sustainability of debt servicing.
The Chinese government is reassessing its role in landmark infrastructure projects in Africa due to concerns over commercial viability, while some African governments themselves are rejecting Chinese financing conditions. This trend is opening a new avenue for concessional funding and boosting the role of development finance institutions while seeking broader collaboration with commercial institutions.
Many sub-Saharan African countries have set ambitious targets around the incorporation of renewable energy in their power mix over the next decade. EXXAfrica’s latest briefing explores the opportunities and challenges for private investors in some of the continent’s most prominent economies.
EXXAfrica unpacks the data and trends behind the main insurance policies available to commercial entities in South Africa, debunking popular opinions around strikes and terrorism in particular.