According to a recent analysis, social instability in Nigeria and other African nations due to difficult socioeconomic conditions is predicted to worsen in the coming year.
The paper, dubbed “Africa Risk Reward Index 2022,” was produced by a consulting firm – ControlRisks for Oxford Economics Africa. It advised incumbent governments and political elites to be aware of cost-of-living demonstrations and continuously watch the popular moods.
According to the article, security agents have so far kept the turmoil at bay.
Nonetheless, the further upheaval was predicted in the coming year as socioeconomic conditions remained difficult.
It read in part, “The latest surge in dissatisfaction has highlighted the inefficiencies in government and stark inequalities across many African countries. In recent years, people across the continent have mobilised in large numbers on various issues in sometimes unexpected ways.”
The report further noted that despite having debt ratios much lower than other African peers, Nigerian debt borrowing costs were expected to absorb around one-third of fiscal revenue this year.
It said that given the proportion of revenue directed towards borrowing costs, and considering how much the government spent on public sector salaries and wages, there was very little scope to redirect spending to provide additional economic support without accruing additional debt. Global risk aversion would make it harder for African countries to gain access to the affordable debt necessary going forward, the report noted.
It further said that this might accelerate fiscal consolidation efforts, implying that short-term fiscal support measures implemented to cushion the impact of the war could be cut short, which would further exacerbate the growing civil discontent that had emerged across much of the continent.
“Faster fiscal consolidation might mean that governments will have to rein in their public investment initiatives and therefore dash their economic growth projections.”
