Ghana ranked among 16 African countries with worsened operational risk – EIU

According to the Economist Intelligence Unit’s most recent Operational Risk Outlook, Ghana is one of 16 African nations out of 51 where operational risk increased between the end of 2022 and the middle of 2023.

The UK-based company claims that the decline in scores has been primarily caused by a decline in the macroeconomic risk subcategory.

“The operational risk scores for 16 of the 51 African countries in EIU’s Operational Risk Service worsened between end-2022 and mid-2023, including those for Ghana, Egypt and Sudan”.

This reflects the detrimental effects of local consumer price increases on company profit margins as well as the broader effects on the exchange rate and monetary policy.

But despite the shocks brought on by the Russia-Ukraine conflict and the wounds the coronavirus epidemic left in 2020 and 2021, macroeconomic risk continues to be the best-rated subcategory in the area, according to EIU, with an average score of 43, or a C grade.

This mostly reflects the comparatively rapid economic expansion brought on by rising populations.

The danger prognosis is improving for 11 of the continent’s 51 nations, including Ethiopia, the Central African Republic, and Tanzania.

The gains are the result of country-specific variables, such as the relative stabilization in Ethiopia brought on by the ongoing execution of its peace agreement following a two-year civil war and the CAR’s successful negotiation of an IMF agreement in April 2023.

“We also believe that there is a high risk of financial sector distress, given high and rising public debt levels and comparatively low levels of banking supervision and autonomy in the region”, it added.