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.
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.
Despite concerns over the pace of incremental reforms to the security sector and progress on privatisations of state-owned companies, the new government remains committed to making comprehensive political changes.
President Magufuli’s nationalist economic stance affects every sector in Tanzania’s economy, which is posing a serious threat to longer-term investment and growth just as the government seeks to issue more debt.
Excessive public debt and mounting political pressures risk undermining Gambia’s ongoing transition and the government’s reform agenda, although a substantial foreign aid endowment has provided a much-needed windfall.
In response to a unified opposition’s pro-business platform ahead of the February 2019 elections, the embattled incumbent is expected to leverage a strong anti-corruption mandate as an electioneering tool, posing fresh contract risks to investors in key sectors and further uncertainty for oil sector reform.
The new government in Angola has made transparency and economic reform its much vaunted manifesto, which is buying it good will among international investors and is boosting its popularity at home. However, central tenets of control over the country’s political economy remain firmly entrenched with the same elite that has dominated Angola for generations.
While the South African economy is again stuck in a deep recession and measures aimed at fiscal consolidation are stalled, the new administration may have achieved sufficiently firm institutional gains to stave off a third sovereign credit rating downgrade by Moody’s in October.
In the first six months of its administration, the new government had taken a measured and pragmatic approach to pursue internal and external peace, enhanced political pluralism, and economic privatisation, yet remains challenged by both socio-political and institutional pressures.
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