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.
The ongoing contract frustration experienced by telecoms firm MTN in Nigeria and the threat of punitive action against banks such as HSBC are highly indicative of intensifying populist and politically motivated rhetoric against foreign investors ahead of next year’s elections.
The newly elected president has consolidated his political authority through shaking up the cabinet, while he is sending a reformist message to creditors that he will prioritise growth as a mechanism for development, beginning with measures to stabilise the country’s precarious fiscal and monetary positions.
A booming economy and improved governance are creating fresh opportunities for project finance deals. While the economic and financial outlook is relatively strong, there are emerging concerns over political patronage and contract discrimination under the current administration.
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- EXX Africa participated at the Bonds, Loans & Sukuk – Africa conference last week in Cape Town.
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