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Aon Global Risk Consulting has considered that Sub-Saharan Africa maintains high risks for companies in 2019, and investment in the region is particularly affected in a year of elections to several countries, including Mozambique.
“More than two-thirds of the countries of Sub-Saharan Africa are at risk of strikes, riots and other types of civil unrest, with a quarter of them at risk of sabotage and terrorist attacks,” said Aon in a report on Terrorism and Political Risk, made in partnership with the Continuum Economics and The Risk Advisory Group, to which Lusa had access.
Sub-Saharan Africa includes six countries of the Community of Portuguese Language Countries (CPLP): Angola, Cabo Verde, Guinea-Bissau, Equatorial Guinea, Mozambique and Sao Tome and Principe.
In a year when more than 20 countries are voting, Aon stressed the instability of the electoral periods, considering the greater likelihood of “disruptive protests, unease and prolonged political uncertainty,” associated with local problems involving socio-economic conditions, labour disputes or inter-community conflicts, which also favour violence contexts.
“[Mozambique] is a good example, which is close to us,” Aon’s commercial director, João Mendonça, said, adding that although the country’s high risk had not changed substantially, “it is natural to feel more social pressure” reflecting on risk indicators, considering the effects of Cyclone Idai.
In the risks identified for the first quart of 2019 in Mozambique, high levels of organised crime and political instability have been highlighted, which “have led to increased violence,” and “compromise the country’s security and makes it less appealing to investors.”
Aon mentioned the country’s infrastructure problems, especially in the field of energy and water supply and the lack of skilled workers as constraints to business activity and said that the agricultural sector, a “critical area,” is particularly vulnerable to climate change.
As for the main impact of the debt crisis, it related to the marked decrease of the currency which boosted inflation, which remains high.
Regarding Angola, another Portuguese-language African country also considered high-risk, the first quarter analysis showed that the risks of political violence remain high, as well as regulatory risks due to corruption, nepotism, bureaucracy and lack of skilled workers.
“The price of oil and the government’s ability to restructure its external debt will determine the risk of currency transfer in the future, as well as the overall performance of the country,” Aon said.
The company identified over 30 countries in sub-Saharan Africa at risk of civil unrest and strikes in 2019, including investment destinations such as Nigeria, Kenya and South Africa.Source: Lusa