The Economist Intelligence Unit (EIU) is warning Ghana and other African countries that the high inflation and interest rates could continue to weigh on growth and investor confidence over the 2023-2024 forecast period.
According to its latest report dubbed “Africa’s Operational Risk Outlook”, these situations disrupt businesses, investment and economic growth, leading to uncertain operating environments.
Furthermore, the UK-based organisation pointed out that although the greater focus will be placed on building regional markets and value chains, progress on the continent-wide African Continental Free-Trade Area (AfCFTA) will remain slow.
This is given the complexities and challenges of setting up effective trading arrangements and existing non-tariff barriers such as poor regional infrastructure connectivity.
“In addition, widespread corruption in public services, bureaucratic red tape, a lack of accountability among civil servants, limited government control beyond key urban capital centres, a lack of judicial independence, excessive state authority, infrastructural deficiencies, shallow financial markets and a lack of skilled labour will continue to hold back Africa’s operational risk environment in the medium term”.
Meanwhile, the five best-rated African countries for operational risk in Africa as of mid-2023 are Mauritius, Cape Verde, Botswana, South Africa and Morocco.
This reflected these countries’ comparatively business friendly tax and trade policies and relative political stability and government effectiveness.
The five worst-rated African countries are Sudan, Somalia, Guinea, Eritrea and the Central Africa Republic, reflecting entrenched political instability, pervasive graft and uncertain government policy (with a high risk of pivoting towards resource nationalism) with regard to foreign businesses.