RiskMap 2016: West African nations striving to escape the commodities downturn in an era of increasingly transnational security threats & issues
While we anticipate governments surviving pressures on them in 2016, there may be heightened volatility and tension during sensitive periods such as elections
African governments will need to be resilient to withstand the electoral, constitutional and financial pressures that will test governments across the region in 2016. This is one of the key messages of RiskMap 2016, published today by global business risk consultancy Control Risks (www.ControlRisks.com). RiskMap highlights the most significant underlying trends in global risk and security, and provides a detailed view from the markets that will matter most in 2016.
The shifts in political power as witnessed during the 2015 elections in Nigeria and Burkina Faso (which had been regarded as the start of a wave of political revolution across the continent, where “people power” rather than cronyism, nepotism and corruption determined the outcome of elections) will not continue in 2016.
RiskMap 2016 expects the slow growth experienced across the continent in 2015 due to the fall in commodity prices, a wave of currency depreciations, weakening terms of trade and restrictions on access to forex to drag on into the first few months of 2016, before a modest pick up as commodity prices partially recover and economies begin to diversify.
The frequency of election related violence; extremism and terrorist attacks, maritime piracy (particularly in the gulf of guinea) and criminality in the region will continue to be a threat to stability. Due to the close interconnectedness among countries in West Africa, there is likely to be an increase in the number of conflicts spilling over boarders such as the fight against Boko Haram which has spilled over the Nigerian borders into Chad and Cameroon. This will mean that reducing conflict and promoting stability will be high on the agenda of policy makers in region for 2016.
Tom Griffin, Senior Managing Director, Control Risks West Africa, comments:
“While we anticipate governments surviving pressures on them in 2016, there may be heightened volatility and tension during sensitive periods such as elections, and the political environments they shape are evolving. This requires investors to understand fully the drivers of change and their potential to impact the business environment, and to be prepared for alterations to posture and strategy.”
Country specific outlook
- Nigeria: President Muhammadu Buhari’s government and policy directions will continue to take shape after his election victory in March 2015. He and his cabinet, recognising the urgency of enacting reforms that will help Nigeria cope with lower revenue from oil sales; will prioritise work on reshaping the national oil company and taking more control over how it uses its income. His administration, seeking to avoid recession by passing an expansionary budget, is expected to target large-scale spending on building essential public infrastructure and focus on diversifying the economy beyond oil and gas. Reforms will however be slowed and made more difficult by a troubling fiscal situation. The security situation remains a concern for Nigeria, particularly in the Delta where the pro-secessionist movement, uncertainty around the amnesty program and unemployment driven social unrest coupled with a lack of representation of the region within federal government is a cause for concern
- Ghana: The country, that has yet to emerge from a fiscal crisis that began in 2012, will hold an election in December 2016 with the government of John Mahama under severe pressure from the opposition, and from a public increasingly dissatisfied with the country’s chronic power shortages and lack of economic progress. The poll is likely to be very closely-fought, and end in a victory for Nana Akufo-Adda’s New Patriotic Party.
- Burkina Faso: After a contested transition period in 2015, Roch Marc Christian Kaboré’s election as president in a peaceful poll will boost prospects for stability and economic growth. However, various challenges await the new president in 2016: from reforming a political system that has entrenched corruption for nearly three decades, to restoring investor confidence in the mining sector and curbing the growing threat of Islamist militancy along Burkina Faso’s northern borders.
For the full report including essays and regional reports, please click here (https://www.controlrisks.com/webcasts/studio/2015-GENERAL/Riskmap-2016/media/2015-12-08-RM-REPORT-2016-EMBARGO.pdf) . To view the Map please follow this link (https://www.controlrisks.com/webcasts/studio/2015-GENERAL/Riskmap-2016/RM-2016-maps-PDFs/RiskMap_Map_2016_UK_WEB-LR.pdf).
Distributed by APO Group on behalf of Control Risks Group Holdings Ltd.
For the map graphic or for further information please contact:
Marketing & business development executive, West Africa.
234 1271 3940
+234 809 042 9430
Notes to Editors:
About Control Risks
Control Risks (www.ControlRisks.com) is a global risk consultancy specialising in political, security and integrity risk that has more than 30 years of experience working in Africa. Control Risks serves global companies that are new to Africa and organisations that know the continent well and are looking to expand their African business. With a team of over 150 consultants in West Africa, Control Risks has unrivalled experience in helping organisations throughout their investment and operational cycle in Africa and provides clients with high-quality support in entering new markets, realising opportunities and building resilience capabilities to manage risk in rapidly changing environments.
Annex: Risk rating changes
- Burkina Faso: Political risk from HIGH to MEDIUM
- Burundi: Political risk from HIGH to EXTREME
- Madagascar: Political risk from HIGH to MEDIUM
- Mali: Political risk from HIGH to MEDIUM
- Senegal: Political risk from MEDIUM to LOW
- Zambia: Security risk from LOW to MEDIUM
- Aruba: Political risk from LOW to INSIGNIFICANT
- Belize: Political risk from LOW to MEDIUM
- Bonaire: Political risk and security risk from LOW to INSIGNIFICANT
- Brazil: Security risk from MEDIUM to HIGH in Pará state, metropolitan areas of Maceió, Fortaleza, Salvador
- Chile: Security risk from LOW to MEDIUM in Bío Bío, La Araucanía, Los Ríos
- Costa Rica: Political and security risk from LOW to MEDIUM
- Mexico: Security risk from MEDIUM to HIGH in Baja California, Coahuila down to MEDIUM
- Sint Maarten: Political risk from LOW to INSIGNIFICANT
- Afghanistan: Security risk HIGH in Samangan and Bamian provinces
- Malaysia: Political risk from LOW to MEDIUM
- Pakistan: Political and security risk from HIGH to EXTREME in FATA, western Khyber-Pakhtunkhwa
- Sri Lanka: Political risk down to MEDIUM in whole country
- Vanuatu: Political risk from LOW to MEDIUM
- Denmark: Security risk from INSIGNIFICANT to LOW
- France: Security risk down to LOW in urban areas
- Moldova: Political risk from MEDIUM to HIGH
- Sweden: Security risk from INSIGNIFICANT to LOW
- Turkey: Larger areas of HIGH security risk
Middle East and North Africa:
- Egypt: Security risk from HIGH to EXTREME in North Sinai
- Libya: Security risk from HIGH to EXTREME; HIGH in Misrata, Murqub, Tripoli, Jafara, Zawiya, Nuqat al-Khams, Jabal al-Gharbi, Nalut
- Oman: Political risk from MEDIUM to LOW
- Saudi Arabia: Political risk from LOW to MEDIUM
- Tunisia: Security risk MEDIUM in the whole country