2018 fourth-quarter forecast

Sep 9, 2018 | 21:56 GMT

4 mins read

Sub-Saharan Africa

Sub-Saharan Africa is a study in diversity. Covering an area that spans the entire width of the continent beginning at the Sahara Desert and ending at the southernmost tip of South Africa, the region is home to countless cultures, languages, religions, plants, animals and natural resources. It’s no surprise that it captured the imagination of Europe’s earliest explorers — and that it continues to capture the imagination of current world powers eager to exploit it. And yet despite the region’s diversity, Sub-Saharan African countries have common challenges — transnational terrorism, rapid population growth, endemic poverty and corruption — that prevent them from capitalizing on their economic potential. The coming years will be critical for the region, especially as its political institutions mature in a rapidly globalizing world.

Covering an area that spans the entire width of the continent beginning at the Sahara Desert and ending at the southernmost tip of South Africa, Sub-Saharan Africa is home to countless cultures, languages, religions, plants, animals and natural resources.
(Radek Borovka/Shutterstock.com)

Key Trends for the Quarter

Ethiopia Embraces Reconciliation and Reform

Continued efforts by landlocked Ethiopia to stabilize its political system, open its economy and secure greater access to regional ports will drive change in East Africa over the fourth quarter. Prime Minister Abiy Ahmed will work to assert control over security forces in the Somali region of eastern Ethiopia. Meanwhile, his attempts to privatize companies such as Ethio Telecom, Ethiopia's telecommunications monopoly, could meet resistance from members of the elite who could try to block or undermine the reforms.

Ethiopia, which earlier in the year moved to mend fences with longtime nemesis Eritrea, will benefit from increased trade and access to its ports. The removal of U.N. sanctions on Eritrea stemming from their reconciliation could accelerate this process. Should the normalization continue, the use of Eritrean ports would help improve Ethiopia's connections to global supply chains and attract investors to its growing market. With these goals in mind, the government also has invested in ports in Sudan, Djibouti and the semi-autonomous republic of Somaliland.

Another Tumultuous Transition in the Democratic Republic of the Congo

The Democratic Republic of the Congo is scheduled to hold much-anticipated and repeatedly delayed elections Dec. 23. The country has never had a peaceful transfer of power, and this time around is shaping up to be no different. Longtime President Joseph Kabila, who is stepping down from office and has appointed a loyalist, Emmanuel Ramazani Shadary, to run in his stead, will try to ensure that his successor wins the tightly controlled election. The Congolese electoral commission, in fact, has barred at least one main opposition candidate from the electoral list (another, Moise Katumbi, is banned from entering the country). Nevertheless, the opposition will try its best to present a unified front against Kabila's political machine. Violence is likely in the wake of the vote, especially if opposition leader Jean-Pierre Bemba rebuilds his militia and mounts an armed resistance against Kabila. Given the Democratic Republic of the Congo's history of tumultuous transitions, unrest may well continue into next year and beyond.

Nigeria Prepares for 2019 Elections

In Nigeria, policy efforts will slow as politicians prepare for February 2019 elections. All signs point to President Muhammadu Buhari seeking re-election on the ruling All Progressives Congress (APC) ticket, but high-profile defections from the APC to the opposition People's Democratic Party (PDP) have weakened his coalition. Defections will remain a concern for the party during the fourth quarter, as will questions over Buhari's health and his fitness to beat the opposition and keep leading. If the PDP follows through on its plans for choosing a candidate, moreover, Buhari will have to square off against a fellow northerner in the race. That means northern Nigerians will retain their control over the lucrative oil industry in the southern part of the country regardless of the election's outcome. Even so, militant groups in the Niger Delta region will stay more or less dormant during the quarter. The government's recent efforts to placate militants by revitalizing its amnesty program and regional development projects have paid off, making them reluctant to conduct attacks for fear of losing these benefits.

A map showing energy infrastructure and ethnicities in Nigeria.

South Africa Returns to Populism

South Africa's ruling African National Congress (ANC) will face a crucial election by the middle of next year. As the contest approaches, President Cyril Ramaphosa will bow to political pressure, shifting from his business-friendly agenda to a more populist platform to shore up support for the party. The leader has largely failed to pull South Africa's economy — the most industrialized in sub-Saharan Africa — out of its doldrums, and economic indicators suggest only modest growth ahead. Consequently, the ruling party will keep up its fight against corruption while focusing on issues popular with the ANC's voter base, such as the controversial proposal to expropriate land without compensation. That initiative will drive foreign investment away from South Africa, though Ramaphosa will try to downplay its effects. Despite promises of economic benefits and a conservative approach to the issue, expropriation will damage the economy and spark concerns about South Africa's future.

Related Forecasts

These Stratfor analyses provide additional insights for the Quarter

As Nigeria's 2019 election approaches, militants in the country's far south and far north will watch to see how the race will affect their struggle against the government

The threat of the Islamic militant group committing brutal attacks close to international energy installations in Mozambique probably won't grow in the fourth quarter, but it will give energy companies pause as they consider additional investment.

Key Dates to Watch

  • Oct. 7: Cameroon holds its presidential election.
  • Nov. 7: First round of Madagascar's presidential election.
  • Dec. 19: Second round of Madagascar's presidential election.
  • Dec. 23: General elections in the Democratic Republic of the Congo.

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