Botswana, Morocco and Ghana are the most politically stable countries in Africa

09 April 2018 Consultancy.africa

Botswana, Ghana, South Africa, Tunisia and Morocco are some of the most politically stable countries in Africa according to a new risk index released by Marsh. Across the board, however, Africa remains the globe’s poorest performing country in terms of political stability.

To say that the last two years have bred a volatile political environment across the globe would be an understatement. Brexit in the UK and the election of Donald Trump as president of the US served the dual purpose of polarising the domestic populations of some of the world’s largest economies, while simultaneously alienating them from the international arena.

Since these developments, tensions have escalated around the globe, which includes the most pertinent threat of a nuclear deadlock between the US and North Korea. On the economic end of things, the inward looking trade policies of the US have furrowed the brows of business leaders across the world. 

Africa has been no different, although the instability and change on the continent has had a positive tinge to it. Over the last year, several countries have seen political upheavals and transitions of power, the most notable of which came in South Africa and Zimbabwe. For some countries, these transitions went off smoothly, while others had to contend with escalations in violence and political slander.

Botswana, Morocco and Ghana are the most politically stable countries in Africa

So the world is navigating a high-risk period, and risk-management consulting firm Marsh has published its Political Risk Map 2018, to give an overview of the global risk landscape. The map is based on research conducted by BMI research, which revealed that Africa has the most risky political environment in the world, despite the fact that a number of countries saw substantial improvements in their risk scores.

In order to compare risk scenarios, the map rates countries on a scale from 1-100, wherein any score less than 49 is considered unstable. The rating is termed as the short-term political risk index (STPRI), which includes government influence on policy-making, social stability, risks of a coup, and other immediate threats to political authority.

Based on these metrics, despite most countries registering an increase in score, only six countries in Africa registered an STPRI of more than 50, classifying the rest of the continent as considerably unstable, including Nigeria, which is the continent's biggest economy. Five of these countries, namely South Africa, Namibia, Ghana, Morocco, and Tunisia scored between 50 and 59, of which Morocco had the highest score of 57.9.

Short term political risk scores in Africa

Botswana was the only country that made it to the 60-69 category with a score of 60.7. At the other end of the spectrum, conflict-ridden South Sudan predictably occupied the bottom spot on the continent, with a score of 20.7, immediately preceded by the Central African Republic with a score of 25.5.

In terms of changes over the last year, Marsh highlights the countries that underwent the largest transformations. Zimbabwe’s political transition was a smooth one, which has manifested itself in the country’s positive jump of 7.7 points; the second highest jump behind Angola, which jumped by 8.1 points.

The biggest drop of 9.2 was reported by Ivory Coast, reportedly due to the upcoming change of power in 2020, which has prompted a display of political might and unsettled the country’s political environment. Kenya’s contentious election brought about a drop in its score as well, driving it down by 8.4 points, compounded by the additional risk posed by the country’s public-debt levels. Other big drops were recorded by the Democratic Republic of Congo (7.3) and Gabon (6.7).

However, political instability is a worldwide phenomenon in the contemporary scenario, and other regions were not far behind in terms of risk profile. The Middle East is the second most unstable region on the map, with Yemen emerging as the riskiest country, followed closely by Syria and Iraq. Latin America came in third in terms of risky regions, driven down by low scores in Venezuela, Suriname, and Guyana. 

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Market trends that are emerging in a post-digital African economy

15 April 2019 Consultancy.africa

The discourse is now moving to a post-digital world, where the differentiating factor among a sea of digitalised firms will become the capacity to deliver personalised services based on individual customer needs – among other things – according to a new report from global management consultancy Accenture.

Businesses in Africa have been navigating a period of rapid digitalisation recently. The continent is set to have as many as 1 billion internet connections over the next two years, which means that the population is set to be wired in. The business environment has been looking to capitalise on this digital market.

While the bigger firms have been quick to adopt digital technology within their operations, smaller businesses were initially weary due to the high costs involved in digital transformation. Nevertheless, a number of these firms are realising the value of digital integration, and Accenture is looking towards the next step.

As per a new report from the firm, most businesses are on their way to digitalisation, which is restoring a certain uniformity to the market. In this context, digitalisation is no longer the differentiating factor. Businesses must now focus on developing mechanisms for customer relationships, among other enhancements.

Market trends that are emerging in a post-digital African economy

The technology that will take centre stage in the new scenario includes distributed ledger technology, artificial intelligence, extended reality and quantum computing (DARQ). Such technologies allow firms to “reimagine entire industries”, as per the firm’s analysis, and nearly 90% of firms are already experimenting with such technology.

Another key trend that is emerging in the post-digital world is the need for cyber security. According to Accenture, cyber security is no longer an individual effort from companies, but must be a collaborative effort across all stakeholders in any given sector that has digitally integrated.

“Ecosystem-driven business connections increase companies’ exposure to risks. Leaders recognise that just as they collaborate with entire ecosystems to deliver best- in-class products, services, and experiences, security must join that e­ffort as well,” says the firm.

“Technology is creating a world of intensely customised and on demand experiences, and companies must reinvent their organisations to find and capture those opportunities as they come,” adds the firm, urging that meeting customer needs is now more about speed than about service.