Ebrahim Raisi emerged victorious in the June presidential election consolidating conservative control over the country’s key institutions. The main focus of the new president is likely to be on reviving the economy, including high-profile anti-corruption efforts. Additionally, a return to the nuclear deal may still be on the cards, despite prevalent anti-US rhetoric. And perhaps, there may even be scope for some de-escalation of tensions with Iran’s main rivals, the US and Saudi Arabia.
While the launch of the African Continental Free Trade Agreement at the start of this year was greeted with widespread optimism, trade under the agreement has yet to gain much traction owing to slow implementation and a range of enduring obstacles. Most countries are already slipping behind implementation deadlines, while only large, diversified economies are set to benefit from the free trade provisions in the short term.
The worst economic crisis in 45 years has left Cape Verde increasingly exposed to organised crime and money laundering that are undermining the country’s political stability and eroding its judicial independence. Based on a new investigation and risk assessment by PANGEA-RISK, the archipelago’s favourable rankings on global indexes no longer match the situation on the ground.
Ahead of the second filling schedule of the Grand Ethiopian Renaissance Dam in July, opponents of Africa’s largest hydropower dam project are running out of options for a mediated solution to a Blue Nile water rights dispute. The prospect of military strike action on the dam by Egypt, Sudan, and proxy forces remains unlikely but is becoming increasingly probable. PANGEA-RISK assesses the military capability and tactical options at hand in case a mediated resolution fails in coming months.
Proposals on how to redirect IMF international reserve assets from developed countries to emerging markets are failing to make headway. The prospect of blanket debt relief in Africa remains remote, while deferred interest on bilateral and concessional loans will become due from next year. Few countries will be able to make such bullet payments on time. Nevertheless, some debt distressed countries are benefitting from case-by-case relief measures and settling of long-held arrears.
Sudan’s transitional government continues to grapple with the reforms necessary to turn its economy around as debt has accumulated to unsustainable levels. Sudan has taken large strides towards securing debt relief, although immediate challenges to this ultimate prize include reining in the fiscal deficit, stabilising inflation, and maintaining domestic stability.
The region’s notable resilience in 2020, despite the difficult economic environment, indicates that the banking sector outlook for North African banks is likely to remain stable for 2021, due to an anticipated gradual normalisation with business volumes and growth in revenues. However, a return to pre-pandemic performance levels remains uncertain and results are likely to remain varied, at least for the coming 12 months.
Turkey’s economic policy is again at a crossroads, with currency volatility reaching a record high on concern about central bank reserves, foreign borrowing needs, and a surge in coronavirus cases that imperils tourism revenue. The leadership’s unorthodox economic policies have long fuelled unease among investors, who have pulled money out of Turkey in recent years over concerns about Turkey’s stability.
A handful of African countries will begin to emerge from the pandemic this year. Based on the latest economic outlook data and PANGEA-RISK’s updated quantitative country risk ratings, we assess the trajectory of the pandemic in Africa, the road ahead for the vaccination rollout, persistent sovereign debt concerns, and the most likely winners and losers as the continent tentatively steers toward recovery.
The results of Djibouti’s 9 April presidential elections seem unrealistic given evidence of ballot burning by the country’s aggrieved population. Despite prospects of a swift economic recovery this year, there remain serious concerns over debt affordability, especially to China. Meanwhile, the country’s entrenched elite and the security forces are increasingly implicated in regional arms trafficking allegations.