Fresh political pressures on the peace process coincide with the commencement of commercial diamond extractions, raising renewed concerns over political instability and contract frustration in the mining sector.
As the opposition alliance fractures, the probability of victory by the governing coalition’s presidential candidate has increased, while the possibility of an election postponement has been significantly reduced.
The condition of President Bongo remains clouded in uncertainty, even though a political transition is likely to be underway which will ensure economic stability, yet much-needed reforms to the oil sector are likely to be stalled.
As the government steps up intimidation of its LGBT community, it risks the suspension of donor aid and a wider international backlash, which may well play into the president’s hands as he seeks to target foreign investments.
The post-election climate has been brightened by a large hydropower investment and a positive economic outlook; however, the threat of insurgency, fragile debt sustainability, and lack of political succession planning will remain longer term threats to stability.
A political stand-off over cabinet appointments is expected to exacerbate the polarisation between partisan supporters ahead of the 2019 elections, while falling foreign reserves bode ill for import cover and debt servicing.
Concerns over the reliability of electronic voting machines, mounting logistical challenges, and the growing prospect of an opposition victory are raising the probability of another postponement of upcoming general elections, despite the international condemnation such a delay would incur.
Both presidential campaigns are focussing on building broad-based local political coalitions to ensure victory in 2019, yet slowing investment and frustration of foreign investments are hampering the economic recovery and imperilling the local banking sector.
Ahead of next year’s elections, the government will maintain the political status quo and boost welfare spending in order to curb any outbreaks of unrest; yet falling foreign exchange reserves will determine longer term succession scenarios and pose a nascent threat to repayment schedules as debt balloons.
While the pre-election climate has been relatively peaceful, the probability of a political fall-out is high in the two month outlook, which raises risk of electoral unrest and associated commercial disruption.
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