The coming month is likely to see an intensification of militant activity in several areas, with an escalation in violence in north-eastern Nigeria and western Niger, and an attack in northern Ivory Coast signalling the resilience of regional insurgencies in the Sahel and Lake Chad regions. In Mozambique, militants conducted a major attack on an oil and gas sector hub in north-eastern Cabo Delgado province, dispelling claims that the insurgency is on the back foot. Election-related unrest will present a sustained threat in Chad, Benin, and Uganda, while worsening political and socio-economic issues will drive a heightened likelihood of demonstrations in Algeria, southern Iraq, Senegal, and Yemen. In Jordan, protests have erupted over the perceived mishandling of the COVID-19 crisis. Further COVID-19 restrictive measures in Kenya threaten to disrupt local travel and stimulate popular frustrations.
Following intensified fighting on Yemeni fronts and a renewed cross-border campaign targeting Saudi strategic assets, the emboldened Houthi movement appears to be in a favourable position to maintain its current dominant position in northern Yemen, which undermines the prospect of ending the conflict this year.
Africa’s regional economic communities, common markets, and currency unions will be crucial to drive a post-pandemic recovery and boost intra-regional trade under the continent’s new free trade pact. While some regional blocs in the East and West are better suited to accelerate integration and take advantage of new trade and investment opportunities, institutions in Central Africa are poorly equipped to enhance their region’s competitive advantage. PANGEA-RISK compares six African regional blocs to determine the criteria for success.
France has signalled that a shift is underway in its strategic approach in the Sahel, with the establishment of Task Force Takuba pointing towards the adoption of a lighter military footprint and a greater reliance on European security partners. However, this change is unlikely to have a meaningful impact on deteriorating security conditions across Mali, Burkina Faso, and Niger.
After suffering its worst year in decades, Lebanon’s economic, banking, and political crises show no signs of easing in 2021. Without meaningful reform to address sectarianism, corruption, poor public services, and currency devaluation, among other issues, Lebanon’s country risk outlook will continue to deteriorate and risk spiralling toward fresh sectarian conflict.
Growing demand for African oil, natural gas, and metals is driving anticipation of another commodity super-cycle on the continent. However, many resource dependent countries will struggle to emerge from the pandemic due to their high debt servicing costs and entrenched political risk. Meanwhile, economically diversified countries are set for a faster and more sustained economic recovery this year.
Some 13 presidential ballots and up to 20 legislative and local elections will determine the political risk outlook for many African countries in 2021. Crucial votes are also expected in the Middle East this year. PANGEA-RISK identifies the main elections to watch and assesses the risk outlook across these regions as elections proceed during the second year of the pandemic.
A renewed campaign of asymmetric attacks by Yemen’s Houthi movement since late 2020 is aimed at pushing Saudi Arabia to consider concessions in eventual negotiations, and to increase Iran’s leverage over regional shipping and oil supplies. The risk of attack on marine and oil infrastructure will continue to rise in the six-month outlook with notable implications for insurance premiums.
A violent dispute over land rights at the Black Nile in Sudan risks escalating nationalism and warmongering over a hydropower dam at the Blue Nile in Ethiopia. The dam is also at the centre of a renewed ethnic conflict that threatens to spill over from the 2020 Tigray War. A new US administration and potential mediation by the UAE will play a critical role in coming months to avoid another war in the Horn of Africa, even while the Tigray conflict still simmers and risks destabilising the whole region.
In the coming year, Sudan is likely to make the most significant improvement to its country risk outlook following several recent developments, while Egypt and Iran are also set to make important headway in 2021. However, previous investment favourites Ethiopia and Zambia, alongside Turkey, will see substantial deterioration in their country risk outlook this year. PANGEA-RISK assesses the key drivers of risk in Africa and the Middle East for the year ahead.