Ghana has found its place among the ranks of 16 out of the 51 African countries where operational risk has escalated from late 2022 to mid-2023, as outlined by the latest Operational Risk Outlook by the Economist Intelligence Unit (EIU).
The UK-based organization has highlighted that the surge in risk scores can be chiefly attributed to a deterioration within the macroeconomic risk subcategory.
The EIU’s Operational Risk Service has tracked the operational risk scores of 51 African nations, revealing that during the period in question, the scores for 16 countries, including Ghana, Egypt, and Sudan, took a downward turn. This downturn mirrors the adverse effects of mounting domestic consumer prices, leading to a squeeze on businesses’ profit margins, and triggering wider consequences for exchange rates and monetary policy.
However, despite grappling with the reverberations of the Russia-Ukraine conflict and the scars left by the COVID-19 pandemic in 2020 and 2021, the EIU has noted that the macroeconomic risk category still maintains its position as the best-rated subcategory across the region. This category achieves an average score of 43, corresponding to a C rating. This resilience is primarily attributed to the relatively swift economic growth driven by expanding populations.
In parallel, a positive outlook is observed for 11 of the 51 African nations, including Tanzania, the Central African Republic (CAR), and Ethiopia. These improvements reflect country-specific factors such as the stabilization efforts underway in Ethiopia, aligning with the ongoing implementation of its peace accord following a two-year civil war. Additionally, the CAR’s achievement of an International Monetary Fund deal in April 2023 has contributed to its improved risk outlook.
The report also underscores concerns regarding the potential for financial sector distress, citing elevated and escalating levels of public debt, coupled with comparatively limited banking oversight and autonomy in the region.
Source : Joy News
