2019 Global Risk Forecast - Sub-Saharan Africa

In 2019, Sub-Saharan will see political transitions undermine security and increase travel risks in the two largest economies Nigeria and South Africa while unfinished or long-delayed political transitions in the Democratic Republic of the Congo (DRC) and Ethiopia will present stability risks.

Sub-Saharan - Protectionism, transition and elections

  • Increasing protectionism worldwide, fuels currency volatility and hampers African resource-rich countries revenue-generating capabilities
  • The intense competition between China and the United States will intensify in Sub-Saharan, while smaller challengers in Europe and the Gulf could add to the disruption
  • Political uncertainty and probable conflict will result from political transitions in the DRC and Ethiopia, potentially spilling over to their neighbouring countries
  • The two largest economies  Nigeria and South Africa head to the polls, raising the risk of civil unrest which will hamper travel and see security provisions deteriorate
  • Elections in frontier markets such as Cote d'Ivoire and Senegal, as well as in Chad, will present similar risks

Executive Summary In 2019, Sub-Saharan will see political transitions undermine security and increase travel risks in the two largest economies Nigeria and South Africa as well as in the frontier markets of Cote d'Ivoire and Senegal. Unfinished or long-delayed political transitions in the Democratic Republic of the Congo (DRC) and Ethiopia will present stability risks for those governments, while also raising the risk of conflicts escalating in their surrounding neighbourhoods. Meanwhile, the spill-over effects from increasingly protectionist stances in the two global economic centres China and the United States will damage the macro-economic outlooks of many economies in the region, particularly those that are heavily indebted or rich in crude oil. 

Read more:'Ethiopia's restart after period of grace Increasing protectionism and continental shakeups The increasing protectionism between China and the United States is having serious implications on African economies. It is driving an intensification in currency volatility of the South African rand, and it is slowing demand for oil and mining commodities, which are key revenue earners for many African governments. With many of them still reeling from the 2014 commodity price-crash, which forced them to subscribe to new debt and increase the public deficit, higher interest rates in the U.S. will seriously challenge the ability of many heavily indebted countries, such as Ghana, Kenya, or Zambia, to manage their respective debt burdens. A risk of default is therefore elevated in several parts of Sub-Saharan. 

Read more: Ghana, the spending spree continues The growing friction between global powers China, Russia, and the United States, as well as the European Union countries, will continue intensifying through proxies on the African continent. A case in point is Djibouti, but competition over the development of critical infrastructure is also likely to grow in Angola, the DRC, Ghana, Kenya, or Guinea. In addition, the number of spooks on the continent will almost certainly grow. Transitions: Unfinished business Political transitions across the continent will reach critical inflection points in 2019. In the DRC a sleeping giant voters elected their next president in December. To many observers surprise, the new leader was not Emmanuel Ramazani Shadary, the anointed successor of outgoing President Joseph Kabila. Instead, the electoral commission, CENI, on 10 January 2019 announced Felix Tshisekedi the leader of opposition party Union pour la Democratie et le Progres Social (UDPS) as the next president. But suspicion of a negotiated 'coup' between Kabila and the president-elect quickly grew, locally and abroad. The national episcopal council, CENCO, questioned the veracity of CENI's vote-tally, while opposition leader Martin Fayulu alleged fraud, saying he had won with 60 per cent of the vote, and entered a legal challenge at the constitutional court. Given Kabila's support at the court, Fayulu's challenge faces serious obstacles. Personality politics dominated the presidential election campaign, which has raised the risk of violence continuing in the first quarter of 2019. Fayulu's supporters are unlikely to recognise the results, while Tshisekedi's supporters are unlikely to accept their candidate's victory being taken taken away from them; especially from a candidate, Tshisekedi's supporters argue, who does not have the same wide-ranging support as the UDPS. This was their reason given after abandoning the opposition coalition, Lamuka, approximately 24 hours after having agreed to Fayulu as their candidate. Should the unrest drag on, it will certainly divide the opposition further, providing little room for the prospect of change over the coming term. In the face of a legislature that is widely controlled by Kabila loyalists, Tshisekedi's promises including to review a mining code that was adopted last year look very slim, and continuity is likely to be the adopted approach during the next five-year term. In response, opposition groups will continue to mobilise their supporters to protest in major cities. In the longer term, and should no solution to the current unrest be found, more extremist potentially armed responses are probable, particularly in the north-eastern provinces of Ituri, Maniema, North-Kivu, and South-Kivu where numerous non-state armed groups already operate and opposition to Kabila's rule continues to be strong. The reshaping of geopolitics in the Horn of Africa, will gain more international attention in 2019 as new and old investors are scrambling to get a piece of the cake. However, the stability of the region is contingent on the situation in Ethiopia, a regional powerhouse, where the new and young prime minister, Abiy Ahmed, is leading an ambitious reform programme that is upsetting some within the old guard. Although widespread violent protests in Amhara and Oromo kililoch (regional states) have largely subsided, inter-communal clashes have mushroomed in other parts of the country instead. Unless Abiy is able to turn the tide on the mounting grievances in the traditional power centre among the Tigrayans. Externally, regional stability is challenged by state elections in Somalia where the federal and federated governments are in open conflict over turf, not least in relation to the signature of offshore oil and gas concessions, or infrastructure development projects. Competition between global infrastructure providers in China, France, or the Gulf will fuel further distrust between regional players and present medium-term investment risks to foreign financiers. 

Read more: Puntland's growing importance, a destabilising factor for Somalia Elections to watch: Two heavyweights and the West African frontiers Africa's two largest economies are electing their next president in February. In Nigeria, the incumbent president, Muhammadu Buhari, is running for re-election on 16 February on a similar platform as he did in 2015: fight corruption, revive the economy and destroy Islamist insurgencies in the north-east. Added to that is rampant inter-ethnic hostilities in the Middle Belt states between farmers and herders. His main contender, Atiku Abubakar, is campaigning on similar promises. In essence, neither candidate's campaign programme stands out and it will ultimately come down to their own personalities and ability to form strategic alliances ahead of the vote. In addition to the president, Nigerian voters will also pick 29 governors of a total 36 states.

Land redistribution and improved equality between white and black communities will be key topics in the campaign.

In South Africa, voters will choose their next president by 4 August 2019, although no date has yet been fixed. The ruling African National Congress (ANC) the party seen at the centre of the liberation struggle against apartheid is facing legacy issues, in large part left from the presidency of Jacob Zuma who, along with many of his allies, stands accused of corruption. Land redistribution and improved equality between white and black communities will be key topics in the campaign. This risks to further polarise political actors, and divide the ANC. President Cyril Ramaphosa's main challenge is to free the country from the bad reputation left by Zuma's presidency among international investors, while courting the Zuma camp of the party. Another headwind for the economy is the growing protectionism between China and the United States which will undoubtedly fuel increased volatility of the rand in the coming 12 months. The ANC will likely remain the biggest party in South Africa even after August 2019, but it will see its influence continue sinking in large urban areas, while the Economic Freedom Fighters and Black Land Black First (BLF) movement stealing the support from more conservative ANC voters. In West Africa, high-stake elections are planned Chad, Cote d'Ivoire, Guinea and Senegal. The aftermath of highly contested and post-electoral violence continues to play out in Guinea, where legislative elections in January could face delays, which risks fueling more anger. In Chad, repeatedly delayed legislative elections are scheduled for May 2019. Unsurprisingly, the ruling Mouvement patriotique du salut (MPS), founded by President Idriss D'by Into, is likely to again win a landslide parliamentary majority, amid probable opposition boycotts. The popular votes will be more competitive in the frontier economies of Cote d'Ivoire and Senegal. In the former, incumbent President Alassane Ouattara is seeking re-election after a drawn-out transition following the 2010 presidential election, and the months of hostilities between armed militias that ensued, but which ended in a French-assisted military intervention to oust Laurent Gbagbo from the presidential palace; while Gbagbo and his supporters claimed they had won the elections, Ouattara won the support of Western powers who considered him the legitimate winner. This contention still dogs contemporary Ivorian politics, and will continue to pose a security and stability risk in 2019. A series of mutinies staged by different units of the security apparatus in 2017 confirms these concerns, and the groups are likely to again be politicised, raising the likelihood of further military-related unrest ahead of and after the plebiscite. In Senegal, President Macky Sall is also running for re-election on 24 February. He has overseen strong economic growth of more than 7 per cent off the back of improved international conditions, such as higher oil prices and new energy reserves discovered off its coast. While support for him has dwindled over the past year, few potential candidates appear able to realistically challenge him. The main contender and former mayor of the capital Dakar is behind bars, and is unlikely to be able to run.