SBM instability risk index places 5 SSA countries on red watch

SBM Intelligence has recently released a report highlighting the instability risks faced by countries in Sub-Saharan Africa. According to the report, the Democratic Republic of the Congo (DRC), Central African Republic, Chad, and Sudan are at the highest risk for regime change. The report aims to provide an empirical index measuring the likelihood of African governments transitioning into authoritarian or autocratic regimes, considering indicators such as leadership and governance quality, economic stability, geopolitical interests, and historical context. These factors play a crucial role in assessing political risks for investors and businesses operating in the region. As African countries navigate through election cycles and political transitions, understanding these risk factors becomes increasingly important. Countries like Ghana and Nigeria, with multi-party democracies, face different risk factors compared to others in the region. Economic stability is closely linked to political stability, as citizens' satisfaction with governance often hinges on their economic well-being. Worsening economic conditions, including high debt levels and currency depreciation, can create tensions and fuel political instability, particularly in competitive political environments. Kenya, South Africa, and Ghana are among the countries in the West African region that must carefully monitor their economic indicators to gauge potential political risks. The report also sheds light on the significance of a robust institutional framework and democratic participation to prevent instability and promote governance. The ranking of 47 countries under macro risk indicators provides valuable insights for investors seeking to de-risk their operations in Africa. By understanding and addressing these risks, stakeholders can contribute to creating a more stable and conducive environment for investment on the continent.