The return to Niger of a high-profile opposition leader threatens to derail the government’s carefully stage-managed political transition, although there is little risk that political instability or fresh outbreaks of unrest will impact the country’s sound economic outlook and investment potential.
The peaceful conclusion of the Sidama referendum and the formation of a new governing political coalition last month cover up the extent of Ethiopia’s deep-seated ethnic and sectarian divisions that threaten to intensify political violence over the next six months and further stall the government’s liberalisation agenda in key sectors such as banking, hydropower, and telecoms.
Another outbreak of violence in Tunisia’s restive interior is likely to motivate the country’s new but fractured parliament to throw its support behind an incoming technocratic government. Despite an improving economic outlook, any new government will have to weigh the benefits of an IMF programme that has arguably worsened many Tunisians’ socio-economic grievances.
International pressure to implement South Sudan’s ceasefire and unity government has subsided as the US withdraws its ambassador. However, a renewal of the oil export agreement with Sudan will allow the government to continue pre-export financing of its crude cargoes to fund its expansive budget that lies at the centre of a new dispute with the armed opposition over public spending.
An emerging political dispute between Mauritania’s current and former presidents raises the risk of political instability in the country, although this trend is at least for now unlikely to impact economic performance or frustrate foreign investments in the crucial renewable power, gas, and mining sectors.
The prospect of protracted hyperinflation and the perception of rampant state corruption will trigger more protests and strike action over coming months, especially as public sector employees go unpaid. In response, the military and other security forces may seek a change at the helm of the distressed country.
The new government will maintain its economic diversification agenda and promote Mauritius’ financial hub status with a very healthy economic outlook. In order to distract from perceptions of corruption and concerns over transparency, the freshly re-ignited sovereignty dispute with the UK over the Chagos Islands may become a rallying call for nationalist sentiment.
A lacklustre economy, slow progress on land reform, and mounting evidence of state corruption will narrow the government’s margin of victory at 27 November polls and embarrass the country’s president. The long-time ruling party may abandon its current pro-investment policies in favour of economic stimulus and more left-wing policies that imperil property ownership rights and debt sustainability.
The finance ministry and central bank are making concerted efforts to stabilise the economy and to improve the rapport with the IMF after three years of strained relations. However, President Edgar Lungu’s determination to hold onto power beyond 2021, as well as growing evidence of state corruption and strong indications that fiscal deficit targets will not be met, remain some of the most prominent challenges to any deal with the Fund on a new credit facility.
Near daily demonstrations are expected over the next three weeks ahead of presidential elections as authorities crack down on protest organisers. The military seems determined to remain in power as witnessed by import cuts and subsidy reductions, ostensibly to stabilise foreign reserves, but in reality favouring the military’s business interests.
- NIGER: POLITICAL TRANSITION IMPROVES INVESTOR CONTRACT CERTAINTY AND ECONOMIC OUTLOOK
- ETHIOPIA: NEW GOVERNING COALITION STRUGGLES TO IMPLEMENT LIBERALISATION AGENDA
- SPECIAL REPORT: TENSE GUINEA-BISSAU ELECTIONS PUT WEST AFRICAN DRUGS TRADE IN SPOTLIGHT
- TUNISIA: PROTESTS ADD PRESSURE ON NEW PARLIAMENT TO BACK INCOMING GOVERNMENT
- SOUTH SUDAN: OIL EXPORT-FINANCED BUDGET LIES AT THE HEART OF A NEW POLITICAL DISPUTE