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Trade risks: Temperature rising on the African continent

Trade risks: Temperature rising on the African continent article image

Africa has been hit with numerous bouts of conflicts, terrorism, and social and political tensions, which show no signs of stopping in the near future. 

As a result, the continent will continue to experience fragility and destabilisation, a new report from Coface predicts.

The countries on the African continent have been regularly afflicted by conflicts of different intensity and nature in recent decades. This has caused a decline in investment and trade flows, delaying the development of some African countries.

In its latest panorama of political risks, Coface identifies the risks of instability that impact the region's economic development.

Increasing conflicts

This includes conflicts linked to Islamist groups in the Sahel region and those of political origin. They are sometimes intertwined with ethnic, religious or even linguistic considerations.

Coface’s indicators of political violence confirm a resurgence of violent events compared to the beginning of the 21st century.

Last year, there were almost twice as many conflicts across the continent as there were 10 years earlier.

The number of victims has also doubled and exceeds 70,000 deaths per year for the third time in 30 years.

At the same time, terrorism is spreading as another form of political violence, particularly in areas already affected by conflicts.

Which countries will be exposed to instability in coming months?

After the Algerian and Sudanese springs, it appears that mobilisation movements might emerge in sub-Saharan Africa, Coface predicts.

Democratic practice, at least in its electoral dimension, has become widespread on the African continent since the early 1990s.  Examples include the Democratic Republic of the Congo, Sudan and Algeria.

However, the move toward democracy is not necessarily accompanied by a solid political and institutional framework, Coface notes.

And socio-economic pressures, including unemployment and endemic poverty, exposes some countries on the continent to the risk of future instability.

“Without necessarily leading to large-scale conflicts, as in Libya, or even to regime change, a fragile socio-economic context can, in the long term, cause unrest that can generate, at a minimum, uncertainty in the political environment,” says Coface.

Coface’s political and social fragility index indicates that 10 countries – Angola, Cameroon, Chad, Djibouti, Egypt, Ethiopia, Mauritania, Mozambique, Uganda and the DRC – could be or continue to be shaken by political turmoil.

The increase in mobilisation instruments, such as Internet access and demographic pressure, is notably one of the factors behind the increased risk that could be a potential source of destabilisation in other countries in the longer-term.

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