The African Country Instability Risk Index (Aciri) recently published by SBM Intelligence assessed the stability of 48 African countries based on various factors such as ethnic tensions, coup history, dominant ethnic groups, food security, poverty rate, debt sustainability, conflict and vulnerability, and economic diversity.
Country instability is a multifaceted issue with interconnected political, economic, social, military, environmental, and external factors. The Aciri report provides insights into the challenges and opportunities for stakeholders in each region, offering recommendations on mitigating risks and maximizing opportunities in Sub-Saharan Africa.
The report highlights three key factors – history, economy, geopolitics, leadership, and governance – that contribute to political instability in African countries. It categorizes countries into six stability levels: Red Watch, Critical, Warning, Vulnerable, Stable, and Safe, based on their index scores.
A higher score on the index indicates a higher level of political risk for businesses. Countries scoring 70 and above fall under the Red Watch category, while scores between 60-69 are classified as Critical, 50-59 as Warning, 40-49 as Vulnerable, 30-39 as Stable, and below 30 as Safe. The index helps investors and businesses assess the political risk associated with operating in different African countries.
The top 10 African countries with high instability risk index scores are as follows:
1. Sudan – 79
2. Burkina Faso – 71
3. Central African Republic (CAR) – 71
4. Chad – 64
5. Niger – 62
6. South Sudan – 62
7. DR Congo – 61
8. Eritrea – 61
9. Mali – 61
10. Rwanda – 59
Out of the 48 countries assessed, 31 showed improved performance while 17 reported a decline in their index scores. Angola, Burundi, Chad, Togo, and Madagascar were among the countries that saw significant improvements, driven by factors such as governance reforms and economic growth. On the other hand, Botswana, Seychelles, Nigeria, Namibia, and Zimbabwe experienced setbacks, with challenges ranging from economic downturns to currency and debt crises.
Nigeria, Africa’s fourth-largest economy, faced a score drop of -6 due to the departure of foreign businesses, currency devaluation, inflation, and other economic challenges. The Aciri report serves as a valuable tool for stakeholders looking to make informed decisions about investing and operating in African countries, considering the complex landscape of political instability and risk factors.
