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.
While an alleged coup plot has been overblown by the government for political gain, the incident does put a spotlight on the deployment of politically affiliated militia groups ahead of next year’s elections. Businesses also face heightened risk of contract frustration, tax increases, and discrimination as the government seeks to raise funds for its political campaign.
A sprawling IMF-backed privatisation programme creates exceptional opportunities for investors across diverse sectors. State assets selloffs may also be the only course for Angola to reduce its massive public debt burden, to diversify away from the oil sector, and to slip out of an extended recession. Yet tenders and auctions will need careful management, transparency, and accountability to have their desired effect.