Expert opinion: Political and social risk overview for Sub-Saharan Africa

Mark Rosenberg, Political Economist and CEO of Geoquant tracks social and political risk vulnerabilities in Sub-Saharan Africa.
Mark Rosenberg
Mark Rosenberg
Political Economist, CEO, Geoquant

The ongoing surge in global inflation has sparked concern, among lenders and analysts alike, regarding political and social stability in sub-Saharan Africa, a region where many economies are particularly vulnerable to recent spikes in food and fuel costs exacerbated by Russia’s February 2022 invasion of Ukraine.

Here we use the GeoQuant data system – which tracks 31 fundamental governance, social, and security risks across 127 countries on a daily, forward-looking basis – to highlight inflation-driven political and social risks in the region.

The first figure summarises 10 August’s topline ‘Political Risk’ for all the sub-Saharan African countries in the GeoQuant system. Note that ‘Political Risk’ is a 0-100 score derived from a weighted aggregate of the governance, social, and security risks referenced above. A higher score denotes higher risk.

AGO: Angola, BEN: Benin, BFA: Burkina Faso, CIV: Cote d'Ivoire, CMR: Cameroon, COD: Congo (DRC), ETH: Ethiopia, GAB: Gabon, GHA: Ghana, KEN: Kenya, LSO: Lesotho, MOZ: Mozambique, NAM: Namibia, NGA: Nigeria, RWA: Rwanda, SEN: Senegal, TZA: Tanzania, UGA: Uganda, ZAF: South Africa, ZMB: Zambia, ZWE: Zimbabwe.

We also include our forecast for topline political risk through year-end. Note that while some relatively low-risk countries (for instance Ghana, which is suffering from an economic crisis) are forecast to see increasing risk in the coming months, risk is forecast to decline in higher risk countries such as Burkina Faso (post-coup consolidation) and Ethiopia (lower conflict levels in Tigray) despite high exposure to higher food and fuel prices.

Given the direct, historical implications of higher food and fuel prices for social stability, we focus the remainder of the analysis on ‘Social Risk’. Per the figure, ‘Social Risk’ is (i) structurally far higher in sub-Saharan Africa than other developing regions; and (ii) this risk has accelerated further upward due to the COVID-19 pandemic. As such, the current inflationary ‘shock’ comes at a time of already-elevated levels of ‘Social Risk’ across the region.

Higher food and fuel prices have already sparked a wave of (sometimes violent) social protests and anti-government demonstrations across the region. The next figure helps summarise which countries in the region are most at risk from further social unrest from higher wheat prices (note we include countries which have wheat import and export data available from the Food and Agriculture Organization).

The x-axis tracks each country’s current level of ‘Social Risk’, while the y-axis summarises the correlation between the risk score and wheat price day/day from 1 January 2020 to date. Of particular concern are those in the top right quadrant of these plots owing to two factors: (1) already high ‘Social Risks’ and (2) a strong positive correlation between wheat prices and risk. While Uganda is most exposed to Russia wheat imports, Kenya, Burkina Faso and South Africa screen as countries with the highest risk of related social unrest in this analysis.

In order to bring down inflation and to defend against currency devaluation, many regional central banks are hiking interest rates at a rapid clip since January 2021. Unlike most other frontier and emerging markets, African rates have not increased much more aggressively than during the previous two EM rate hike cycles (January 2012 to January 2016; January 2016 to January 2019). [Note, interest rates in sub-Saharan Africa are already high relative to other frontier and emerging markets]. Nonetheless, and per below, they have increased in all major


While tighter monetary conditions may help improve social conditions in the long run through greater price stability, in the near-term they generally constrain growth, leading to greater socio-economic duress and ‘bottom up’ pressure on policymakers. As a result, social instability becomes more likely. Even inflation-driven protests are unlikely to be quelled, and could well be exacerbated, by the higher interest rates meant to address inflation. In short: we expect to observe a positive relationship between change (namely, increases) in interest rates and change (increases) in our daily measure of Social Risk across the region (and emerging/frontier markets more generally. As per the chart, we do indeed find this relationship across all three cycles.

Notably, this positive relationship has eased (no pun intended) in the current cycle.

Nonetheless, we note that several countries have seen both relatively large increases in interest rates and ‘Social Risk’ since January 2021, including major economies such as South Africa, Nigeria, and Ghana, along with Mozambique.

In sum:

  1. There is a particularly high level of ‘Social Risk’ in sub-Saharan Africa relative to other regions, with the risk of social instability in a wide range of countries increasing markedly since the outbreak of the COVID-19 pandemic and the recent increases in food and fuel prices exacerbated by the Russia-Ukraine war. On a regional level, risk events such as anti-government demonstrations, economic (especially food and fuel price) protests/riots, ethno-religious/xenophobic clashes, strikes and blockades, among others, are more likely. [Notably, ‘Social Risk’ has actually increased more rapidly in South America than sub-Saharan Africa since March 2020, albeit starting from a lower base].
  2. These risks will increase to the extent (i) fuel and food prices continue to increase; and (ii) central banks hike interest rates aggressively in order to counter the resulting inflation.
  3. With the region, countries where ‘Social Risk’ is relatively high and particularly correlative with higher food prices – including Kenya, South Africa, and Burkina Faso – screen as especially high risk for further instances of social instability.
  4. The same is true for countries where interest rate hikes are most positively associated with increases in ‘Social Risk’: Nigeria, South Africa, Mozambique and Ghana.

More BUlletin Publications

Charting a course forward


Charting a course forward: Navigating AI, digitalisation, and economic support amidst unprecedented global change

This May edition of the BUlletin offers fresh insights on embracing and implementing digital strategies, adopting AI tools to enhance efficiency and security, supporting the Ukrainian economy by helping keep trade...

Celebrating 90 years of supporting trade and investment


Celebrating 90 years of supporting trade and investment - 1934 - 2024

Reflecting on Berne Union’s origins and celebrating its achievements. What does the future hold?


Climate Working Group: The continuing momentum for change


Climate Working Group: The continuing momentum for change

The Berne Union’s Climate Working Group is proving a helpful forum for sharing good practice. How is it progressing, and how can our industry continue to help with this initiative?

Claims: Controling Chaos, and Risk Versus Reality


Controling Chaos, and Risk Versus Reality

In this edition we explore BU claims data and its relation to predicting risk since the pandemic, we also feature a broker's eye view of the state of the CPRI market, the bold restructuring of Denmark's investment and export financing with EIFO, how EDC is looking at ESG risks and ...

Landmark modernisation for OECD Arrangement


Landmark modernisation for OECD Arrangement

A bold agreement for the Arrangement marks a positive development for our industry. Also featuring
digital access to export finance for China SMEs, challenging the 'China debt trap' narrative for Africa,
insolvency trends, analysing service ...

What's on the horizon for 2023?


What's on the horizon for 2023?

The pick of key issues to look out for in 2023 – from macro trends, potentially choppy seas for smaller ECAs,  possibilities for using Islamic finance in the renewable energy transition, China’s reopening, a bumpy CPRI outlook, and reinsurance complexities. 

Authors look at...

Digitalisation as a business leadership imperative


Digitalisation as a business leadership imperative

Technology-driven trade and client interaction are nothing new. But increasing investment in digitalisation of fundamental business processes and decision making is driving a new way of looking at trade finance and risk underwriting. Authors highlight successes and challen...

Mobilising Africa's Potential


Mobilising Africa's Potential

Despite the challenges there are many positive opportunities emerging for Africa today

Curated by the BU Sub-Saharan Africa Working Group, authors for this special edition of the BUlletin explore areas of growth and the role of different sources of international finance tapping this

Ripples and After-effects


Ripples and After-effects

exploring the multiple secondary impacts of both the pandemic and the war in Ukraine

from sovereign risk in Africa, to energy security, political violence and the private CPRI market

Shocks and Short Circuits: The Rewiring of Global Trade


Shocks and short-circuits: The re-wiring of global trade

The bright shoots of economic growth are under threat once again
Assailed by commodity supply shocks and political instability exacerbated by the war in Ukraine
Contributors this month look at the complex impacts on trade and investment across developed and...

Diverging Risk


Some predict that 2022 may finally bring us beyond the thrall of the COVID-19 pandemic

But the events of past two years have brought significant divergence of risk across economic and geographic boundaries

Authors this month look at how this is playing out in a range of cases

New Foundations


If the global economy is truly on the road to recovery how can we build the surest path to sustainable growth in our new net-zero world?

New foundations in tech, data, and cooperative frameworks may help guide us into the next phase

Illuminating Climate


Now widely recognised as an economic as well as environmental imperative
The momentum to tackle climate change is building
Changing perspectives, policy, products and processes across the export credit industry

In search of claims


Where is the avalanche of claims and insolvencies expected to emerge from COVID-19?
The picture so far is uneven across geographies, sectors and business lines
And for the future? Well, it depends...

Cross-roads for Africa's recovery


The economic impact of the COVID-19 pandemic on Africa has been considerable and the path of recovery depends on maintaining the support of local, regional and international stakeholders. But which approaches can best build upon the opportunities presented by growing intra-regional trade, and investment in sustainable infrastructure?

Navigating the Brave New World of Trade


With the wounds of the pandemic still under triage, a rebound in trade could the best hope for governments and businesses alike.
But trade is under immense pressure from myriad directions.
How can we maintain supply of finance, in the face of growing demand and irregular patterns of risk?