Political Risk Analysis - Weak Economic Performance Prompting More Uncertain Policymaking - JUNE 2017
BMI View : Political risks in Namibia are set to rise over the coming quarters as President Hage Geingob seeks to consolidate power amid rising public and intraparty dissatisfaction . Policymaking is likely to become more unpredictable and riskier for investors, as expropriation and the non-honouring of contracts become more probable.
Political risks are rising in Namibia as President Hage Geingob seeks to consolidate power, precipitating intragovernmental fissures that will weigh on policymaking. Facing public and intraparty dissatisfaction with sluggish economic conditions, Geingob has begun taking steps to sideline rivals within his South West Africa People's Organization (Swapo) party and shore up public support through more aggressive rhetoric on land reform. Although Namibia remains among Sub-Saharan Africa's most politically stable countries and a clear regional outperformer on our proprietary Short-Term Political Risk Index (STPRI), policy direction is becoming increasingly uncertain, particularly regarding the threat of expropriation and the honouring of contracts, which raises risks for investors.
As a result, we have downgraded Namibia's score on our STPRI from 69.6 to 66.3 out of 100. The lower score reflects our assessment of a weakening 'policy-making process' and declining 'social stability' due to elevated inflation. Namibia retains its ranking at seventh out of 48 Sub-Saharan African countries.
|Declining Social Stability And Policy Risks Weigh On Score|
|Namibia - Short Term Political Risk Index, Out Of 100|