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Francophone West Africa Business Forecast Report Q2 2011
Business Monitor International, March 2011, Pages: 46
Economy Returns To Form, But Slowdown Still On Course Although West Africa continues to benefit from the strengthening global recovery, the outlook is not uniformly positive. While Guinea, for example, has emerged from elections in a relatively strong and stable position, the stalemate in Côte d’Ivoire is now threatening to do serious damage to the economy. These examples serve as a reminder of the role that political risk can play in determining economic outcomes, especially in a year with so many elections scheduled.
The main countries to watch in the Francophone West African space are Niger (March 2011), Cameroon (October 2011) and Senegal (2012). Elsewhere in West Africa, the outlook for Côte d’Ivoire has deteriorated markedly over the past several months, as presidential claimant Alassane Ouattara and incumbent Laurent Gbagbo remain locked in dispute over who won the run-off in November 2011.
The core scenario is now for the country to remain in a de facto divided state, meaning that growth will fall to just 1.2% in 2011 as government spending and investment contract, exports are restricted and strikes flourish. This is significantly worse than the 5.5% growth we had been predicting in the event of a successful election. A third country to watch in 2011 is Burkina Faso, where incumbent Blaise Compaoré won an easy victory in presidential elections in November 2010. Although elections were deemed to be free and fair, enthusiasm for the president’s agenda appears to be waning. The longer he stays in power without delivering any improvement in living standards to the average citizen, the greater the risk of popular sentiment turning against him.
Turning to regional matters, the election of Teodoro Obiang Nguema to the chairmanship of the African Union is likely to raise questions about the organisation’s commitment to democratic principles, especially in a year with so many important elections. By the same token, the role is likely to increase international scrutiny of Obiang’s regime, which is widely considered to be among the most authoritarian and brutal on the continent.
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