|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|
|NAIROBI, Kenya, December 14, 2015 (APO) – People power witnessed in 2014 and 2015, for example in changes of government in Burkina Faso and Nigeria, will be proved limited in 2016. A combination of elections, constitutional pressures and financial difficulties will test governments across the region, including in Chad, Uganda, Congo (Brazzaville), Angola and South Africa. Incumbents will however retain their hold on power. These are some of the key messages of RiskMap 2016, published today by global business risk consultancy Control Risks. 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.
According to RiskMap 2016, entrenched elites continue to hold sway in many frontier markets in Africa and few countries nurture the pre-conditions for change driven by the masses, either through the ballot or mass mobilisation. Amid widespread currency weakness and low commodity prices, the outlook for 2016 looks less gloomy than might be anticipated. With economic downturn in their home market, Chinese companies will continue to look overseas for opportunities to sustain growth. East Africa will remain a key target for Chinese investment. RiskMap identifies Ethiopia as the key regional market to watch in 2016.
Daniel Heal, Senior Managing Director, Control Risks East Africa, comments:
“The changes we have seen in Burkina Faso and Nigeria reflected circumstances unique to each country. In both situations, the growing inter-connectivity of societies and access to communications – both themes of RiskMap 2015 – contributed to landmark political reconfigurations. But these factors alone were not sufficient to generate change. And they are unlikely to trigger change elsewhere in Africa.
“While we anticipate governments across the continent 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.”
Ethiopia – key country to watch: Ethiopia has recorded double-digit growth for the last decade. Opportunities exist in infrastructure, manufacturing, commercial farming, as well as mining, oil and gas.
Burundi: The political climate is likely to remain extremely volatile in 2016. President Pierre Nkurunziza and his entourage are reluctant to make political concessions and resume dialogue with the opposition, despite international pressure. The country sees frequent political assassinations, grenade attacks, unrest, as well as the gradual intensification of a rebellion in the north. Attempts to unseat Nkurunziza are likely to multiply.
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 infrastructure. Reforms will however be slowed and made more difficult by a troubling fiscal situation.
Angola’s political system is under strain from worsening socio-economic conditions and rising tension over President Eduardo José dos Santos’s eventual succession. This will undoubtedly influence the tug-of-war within the ruling People’s Movement for the Liberation of Angola (MPLA) over the presidential succession. But there seems to be limited appetite and capability among the masses to challenge the MPLA’s supremacy.