Eight African countries facing significant political risk

While the global environment is extremely supportive for investment-led growth across the African continent, there are a number of countries facing significant political risk in the coming year which will dampen investment enthusiasm. Standard Bank identifies a few of the most important political risks for the continent from its perspective.

President Goodluck Jonathan

Nigerian President Goodluck Jonathan is expected to win the April poll.

1. Nigeria: incumbency is key

According to the Independent National Electoral Commission (INEC), the presidential poll will be held on 9 April, a week after the parliamentary elections and a week prior to governorship and state assembly elections. Incumbent President Goodluck Jonathan formally launched his campaign in October. Yet perhaps the key election has already taken place at the ruling People’s Democratic Party (PDP) primaries on 13 January 2011, when the presidential candidate was chosen. Assisted by incumbency Jonathan convincingly beat Atiku Abubakar. The good money should certainly be on Jonathan winning the April poll. Perhaps the key risk now comes from the ability of the INEC to deliver a free and fair election, recognised by all parties.

2. Côte d’Ivoire: taking it to breaking point

According the Independent Electoral Commission (CEI) and thus most of the local population and the international community, President Laurent Gbagbo was defeated by Alassane Ouattara in the 28 November 2010 presidential election run-off. The Constitutional Court proved sympathetic to Gbagbo’s demands to ignore sections of the vote and declared him President. The impasse threatens to take the country back to civil war. This is not our core scenario.

Ouattara clearly has moral democratic authority and the support of the international and African diplomatic community. External political pressure is being combined with dissension from high profile figures of Gbagbo’s Ivorian Popular Front (FPI). Clearly the hardcore FPI leadership as well as the presidential guard and some factions of the gendarmerie have plenty to lose if Ouattara were to become president. Although security forces have predominantly supported Gbagbo in the south, we believe moderate elements within the army (including many senior officers) are unlikely to back an increasingly isolated regime.

3. Democratic Republic of Congo: spend, spend, spend

There are already signs of excess fiscal spending ahead of DRC’s general elections planned for November 2011 as President Joseph Kabila prepares to stand again. The need for the incumbent to spend is increased by the fact that the contest is likely to be a close race as veteran opposition leader Etienne Tshisekedi of the UPDS has announced he will run.

Dissensions have also surfaced in the ruling coalition between Kabila’s PPRD and the pro- Lumumbist PALU. Besides, Vital Kamerhe, who has been a close ally of Kabila until recently and is a former President of the National Assembly, will also challenge the incumbent president. While Jean-Paul Bemba is tried by the International Criminal Court for alleged war crimes, his political organisation (MLC) still formally remains the first opposition party in the country.

4. Zambia: will the coalitions hold?

Zambia will most likely hold presidential and parliamentary elections in September 2011. Our core scenario is that the ruling Movement for Multiparty Democracy (MMD) retain power. In particular, we are not convinced that the opposition coalition between the Patriotic Front (PF) and United Party for National Development (UPND) will be able to hold together, once again stumbling on a single presidential candidate. Our core scenario also requires incumbent President Rupiah Banda to hold his MMD party together, with the litmus test being his nomination as MMD presidential candidate in the party’s primaries to be held earlier in 2011.

5. Uganda: end of an era?

President Yoweri Museveni of the National Resistance Movement (NRM) will run in the February 2011 presidential contest. He is probably the favourite to win, but it is far from a done deal. His main challenger is Kizza Besigye of the Forum for Democratic Change, who also stood in 2001 and 2006. Other candidates such as Norbert Mao of the Democratic Party and Olara Otunnu of the Uganda Peoples Congress are likely to perform well. With the contest likely to be close, the potential for a disputed outcome is not insignificant.

6. Southern Sudan: a separate state?

Southern Sudan held an independence referendum on 9 January which will decide whether Sudan splits into two countries. We think the election is likely to result in the formation of a new country in Sub-Sahara Africa. Clearly the President of Southern Sudan, Salva Kiir, and the Sudan Peoples’ Liberation Movement (SPLM) openly backed independence for their region. The uncertainty is the terms via which the separation from the north would take place. There are many unresolved issues including the status of the Abyei region, the oil-revenue sharing framework, the breakdown of assets and debts as well as the citizenship of southerners living in the north. The opportunity for a political impasse is not small.

7. Egypt: like father, like son

The National Democratic Party (NDP) remains the dominant political force in Egypt and now controls almost the entire parliament following the opposition’s boycott of the second round of the parliamentary elections held on 5 December. The outlook for the September 2011 presidential election is somewhat ambiguous because of the uncertainty over President Hosni Mubarak’s succession.

The two most likely scenarios at this stage are that Hosni Mubarak runs for another term or that his son Gamal Mubarak is selected by the NDP as its presidential nominee. In the second case, the transition period is likely to be smooth since Gamal Mubarak would still be supported by his father and the security forces.

8. Zimbabwe: early elections loom

The power sharing government between President Robert Mugabe’s Zimbabwean African National Union–Patriotic Front (ZANU-PF) and Prime Minister Morgan Tsvangirai’s Movement for Democratic Change (MDC) has reached an impasse. President Mugabe is now calling for early presidential and parliamentary elections in 2011, while Tsvangirai would prefer to only hold a presidential poll at this stage. Tsvangirai argues that the 2008 parliamentary results are not in dispute in contrast with the presidential result where he boycotted the run-off.

This article is an extract from Standard Bank’s African Markets Revealed – January 2011 report.