Growing levels of conflict and climate change, as well as a lack of food and energy security in sub-Saharan countries, including the Democratic Republic of the Congo and the Central African Republic, mean that 30% of countries in sub-Saharan Africa face a high risk of “external shocks” to their growth, according to a report from risk analytics firm Maplecroft.
Sub-Saharan Africa is one of the world’s fastest growing regions, but this growth is fragile at best. Some countries in the region continue to experience high levels of domestic instability and there is a high risk of conflict spilling over into neighbouring countries. This has led to a deterioration in the operating environment of sub-Saharan Africa, making it one of the riskiest investment destinations globally, according to Maplecroft’s report, Global Risks and Resilience Atlas.
Maplecroft points to Kenya, which was historically seen as east Africa’s safest business location. But last September, Somalia-based militant group al-Shabab perpetrated one of Kenya’s worst terrorist attacks on the Westgate shopping mall, in what was considered to be the spill-over of political violence from South Sudan, Somalia and Sudan.
Mali’s political crisis in 2012 following a coup d’état saw its risk rating increase steeply from 57th to 13th place last year. And Guinea, Eritrea, Madagascar and Mozambique also experienced significant deteriorations in their business environments.
Maplecroft’s report, which analyses the exposure and resilience of 179 countries to 36 different risk scenarios, reveals that the security profile of the sub-Saharan Africa region as a whole has deteriorated. And ongoing conflict in Syria, coupled with sectarian tensions in Lebanon, means the Middle East and north Africa (MENA) region has also been downgraded from a medium-risk to a high-risk region.
Outside Africa, Maplecroft ranks Syria as the world’s riskiest country. Syria is enduring a protracted civil war that has destroyed the country’s health infrastructure and led to its first polio outbreak in 14 years. Continued internal displacement means neighbouring countries such as Lebanon, Turkey and Jordan are at high risk of experiencing an outbreak of infectious diseases across borders.
In Lebanon, increased sectarian tensions and crossborder incursions have seen the country’s risk profile deteriorate from 36th to 23rd place in Maplecroft’s report. Governance failures in Egypt and Libya mean the MENA region as a whole faces a high risk of political instability.
Meanwhile, political turmoil in Venezuela has caused Maplecroft to downgrade the country’s risk profile from medium to high. Protests against President Nicolás Maduro following the death of the former President Hugo Chávez in 2013 have led to political uncertainty and high crime rates, leaving the operating environment highly volatile.