Ghana continues to enjoy a favourable political climate in the near term as risk to political stability remain low, according to Fitch Solutions. The latest developments in political risks in SSA for April sees the country among the top five in the region.
Ghana scored 69.3 out of a perfect score of 100, performing better than its peers in the West African sub-region. Countries that ranked high include Cabo Verde- 1st (78.3/100), Seychelles- 2nd (74.2/100), Botswana- 3rd (73.3/100) and Mauritius- 4th (71.0/100) respectively. Countries at the bottom with high risks include Chad, Mali, Burundi, South Sudan, Sudan, Democratic Republic of Congo.
This notwithstanding, the political risk in the SSA region remains elevated. This is due to elevated security risks in Chad, policy making obstacles in Ethiopia, and social stability risks in Mauritius. Thus, Fitch Solutions lowered the short term political risk index for the region, reflecting higher political risks for April 2021.
On account of its four risk components, policymaking process, social stability, security, external threats and policy continuity, each component score was above 50 out of 100 threshold, indicating relatively high political stability.
The highest score within the components is security and external threats, which scored 80.0 out of 100. This indicates low risks to the country’s security either internally or externally. Ultimately, current security conditions show increased improvement.
This proves so, unlike the security situation in 2020, where tensions heightened to the build-up and aftermath of the elections coupled with the secessionist uprising in parts of the Volta Region.
Political risk drivers in Ghana and other SSA regions
The better performance in security and external threat index, inter alia moderately high social stability (53.8/100) in Ghana most effectively explains the reason for the move of social media giant, Twitter into Ghana as announced in April 2021.
Twitter indicated that its decision was based on shared values, “free speech, online freedom and the open internet.”
Furthermore, Fitch Solutions scored Ghana’s policy making process 68.3 out of 100 as well as 75.0 out of 100 for policy continuity. Compared with other countries such as Nigeria and Kenya which were likely destinations for Twitter, Fitch Solutions scored 22nd and 26th respectively.
Fitch Solutions indicated a lower score for Chad following the death of Chadian President Idriss Déby Itno in April. Although succeeded by his son, Mahamat Idriss Déby Itno, rebel groups and parts of the population find it a controversial dynastic succession.
This is coupled with “the heightened risk of infighting due to the power vacuum created by the president’s passing. We expect this will add to instability in Chad, with potential spill-over to the wider Sahel region.”
However, Mauritius, which comes fourth faces some social stability risks. Fitch Solutions expect somewhat greater protest risks in Mauritius due to delays in Covid-19 vaccine rollouts.
Together with a sluggish economic recovery in 2021 will amplify anti-government sentiment. Yet, already elevated by the government’s unpopular response to a July 2020 oil spill.
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