STRATFOR: Sub-Saharan Africa – Annual Forecast 2016

Sub-Saharan Africa

Leaders Throughout Africa Cling to Power

During the last two years, several long-ruling African leaders have pushed for constitutional changes to term limits in hopes of prolonging their time in power. The year 2016 will be no different, particularly in Central Africa, where several longtime leaders are pushing for re-election.

The most potentially destabilizing case is in the Democratic Republic of the Congo, where President Joseph Kabila has been pursuing extralegal means to secure more time in office. His actions have included pushing for a constitutional change that would allow him to seek re-election in a vote slated for late 2016. Although he has not publicly announced that he will pursue another term, he will continue making efforts to extend his presidency. If Kabila does secure another term in office, violence can be expected in areas such as Katanga province and North and South Kivu provinces. Sporadic violence directed at Kabila could erupt in the capital.

Across the Congo River in the Republic of the Congo, President Denis Sassou-Nguesso is seeking re-election in 2016 after successfully pushing for a constitutional amendment in 2015 that removed term limits. Sassou-Nguesso does not face armed opposition, and the country’s political opposition is weak, so the former soldier and Marxist leader is almost certain to secure re-election. Even though Sassou-Nguesso is behaving like Kabila, the international community has barely criticized his attempt to extend his term, probably because — unlike Kabila — Nguesso’s bid will not engender much internal strife. Although protests and violence will occur, the unrest is unlikely to grow to an extent that would make Nguesso consider stepping down.

Ugandan President Yoweri Museveni will stand for re-election in February, and while there have been calls for him to step down, Museveni and the ruling National Resistance Movement have enough control that there is little risk of widespread social unrest in the country. In Equatorial Guinea, President Teodoro Obiang Nguema Mbasogo will be up for re-election in November. He is Africa’s longest-standing leader, but he is believed to have terminal cancer. Although he is supporting his son as his successor, this arrangement would not be popular among Equatorial Guinea’s political elite and could cause fractures in the country at the highest level as Obiang’s health rapidly deteriorates.

Leaders in Rwanda and Angola will be considering whether they want to stand for re-election in 2017. In Rwanda, a successful referendum enabled President Paul Kagame to run for a third term if he chooses. extension of term limits that allow him to run for re-election. This could result in a national referendum on the issue in 2016. In neighboring Burundi, the president’s decision to seek another term caused an eruption of violence in 2015. However, Kagame has complete control over Rwanda and likely will be able to push for an extension with faces little opposition. Although he is not barred from standing for re-election, Angolan President Jose Eduardo dos Santos will mull stepping down in 2017 but will continue to consider his position carefully during 2016, perhaps even anointing a potential successor.

South Africa: The ANC’s Slow Decline

The South African economy will continue to feel the brunt of low commodity prices, a weak currency and social tension from periodic labor strikes. South Africa is expecting its economy to grow between 1 and 2 percent in 2016, and there is a great risk its economic difficulties will only multiply. Several factors could depreciate the South African rand in 2016, as the U.S. Federal Reserve considers a slow, long-term increase in U.S. interest rates, contributing to inflation concerns.

The weak economy will continue to feed into tense labor negotiations in the mining sector, where continued low commodity prices will constrain revenue for mining companies as demands from labor unions squeeze their margins. Meanwhile the unions’ demands likely will go unfulfilled, raising the prospects for strikes. The Association of Mineworkers and Construction Union has already planned an eight-month strike in the gold sector after rejecting proposals from last year’s labor negotiations. Such an extended strike may prove excessive and unsustainable, however; the union’s members are already struggling to stay afloat financially. Still, South Africa is set for another year of tense labor negotiations.

The strains on various parts of the South African economy will contribute to the gradual decline of the African National Congress (ANC) as the hegemon in South African politics ahead of the next party congress in 2017. The most visible sign of the party’s weakening position will be in the 2016 municipal elections. The Democratic Alliance — South Africa’s largest opposition party — will strongly challenge the ANC in Pretoria, Port Elizabeth and other urban areas, targeting unemployed but educated urban, middle-class black South Africans. The Economic Freedom Fighters party seeks to gain influence among the working classes and unemployed or underemployed black South African laborers, such as miners. The ANC will retain the broadest base of support, but beyond 2016 and ahead of the national elections in 2019 its majority could slowly turn into a plurality as the Democratic Alliance and Economic Freedom Fighters gain ground.

Nigeria: Slow Progress on Energy, Corruption and Security

After finally naming his Cabinet at the end of 2015, President Muhammadu Buhari is in position to begin implementing his policies fully. Maintaining security in the northeast is a priority for Buhari’s administration because Wilayat al Sudan al Gharbi — the group formerly known as Boko Haram — is heavily concentrated in that area. However, the two most dynamic initiatives that Buhari will advocate in 2016 are maintaining the fight against corruption and general reform in the energy sector.

Buhari’s anti-corruption campaign will be difficult and long. His biggest push will be in areas of revenue generation and revenue management, such as the oil industry and the central bank, and will focus on high-profile targets, such as former government officials. Although Buhari will likely be successful at putting programs into place initially, the country’s weak institutions will blunt the effectiveness of his initiative. He will make the slowest progress in the fight against low-level corruption, bribery and excessive red tape in 2016.

Nigeria is likely to make progress in reforming the oil sector, although this process will continue beyond 2016 and will not be uniform. Nigeria will split up its Petroleum Industry Bill into several sections, putting reforms that target the upstream sector — such as negotiating contracts with international and private oil companies — on a faster track, although implementation will take months or longer. Progress on issues that are more politically difficult to achieve, such as fuel subsidy removal or a comprehensive revenue-sharing agreement among provinces, will be slow.

Buhari is unlikely to completely remove fuel subsidies unless the states’ financial system rapidly deteriorates over the course of the next year. Nigeria’s currency, the naira, will remain under pressure, as will the Nigerian economy, because of low oil prices and potential U.S. interest rate hikes. The Nigerian Central Bank will have to make adjustments to the country’s currency regime.

Nigeria’s security situation will remain relatively static in 2016. Wilayat al Sudan al Gharbi will continue to be a constant security threat in the country’s northeast. However, Buhari’s military actions will largely contain the threat posed by the group, localizing it in the northeast. There will be sporadic attacks outside this region, but they will be infrequent and on soft targets. Wilayat al Sudan al Gharbi will continue to be a danger in adjacent areas of Cameroon, Niger and Chad, and Nigeria will continue coordinating with those countries’ militaries.

Buhari will continue the militant amnesty program and other mechanisms to placate the Niger Delta region through patronage. As a result, the region will not return to widespread politically motivated violence targeting the oil and gas industry — a consequence of the Niger Delta losing the presidency when former President Goodluck Jonathan lost his re-election bid in 2016. However, criminal networks will continue conducting armed robberies, kidnappings for ransom, hostage-takings, pipeline vandalism and bunkering throughout the region.

West Africa Tries to Cope with Low Oil Prices

Like Nigeria, the rest of West Africa will continue to feel the pain of low oil prices. The economic consequences throughout the region, including continued budget cuts and lower social spending in countries such as Gabon and Angola, will not considerably threaten any government’s control (except possibly Equatorial Guinea).

One interesting case is Ghana, where the government will continue to be squeezed for cash and require payments from the International Monetary Fund under its three-year bailout package that begins next year. This will put President John Dramani Mahama under pressure ahead of the December 2016 presidential elections, where his National Democratic Congress will face stiff competition. The austerity required under the terms of Ghana’s bailout will constrain government spending programs in the lead-up to the election.

In Mali, terrorist attacks targeting both domestic and Western interests will continue. Assaults will occur most frequently in northern Mali, but neither the south nor the capital Bamako, in the southwest, will be immune to extremist violence. France and the Malian army will continue to conduct strikes and raids against the various militant groups operating the region, but these militants are unlikely to significantly reduce the tempo of attacks, particularly in Mali’s north.

East Africa Attempts to Put Itself on the Global Energy Map

While West Africa contends with low oil prices, East Africa will continue making progress toward establishing itself as a global energy producer. In Tanzania, now that elections have been held and the country has finally passed its petroleum act, the government will work with international oil companies to provide an environment conducive to making plans for a liquefied natural gas export terminal in the country’s south. Next door in Mozambique, the government will do the same; Italian energy firm Eni and U.S.-based Anadarko hope to make final investment decisions on LNG projects in the country’s northeast. In Uganda, Kenya and Tanzania, negotiations will continue over crude oil pipeline options to link producing fields in the Great Lakes area with export facilities on the East African coast, but a full agreement will not materialize in 2016. Ultimately, international oil companies’ decisions will be determined by global conditions largely outside their control.

Although South Sudan’s internal peace process will continue to falter in 2016, South Sudan and Sudan will began to renegotiate oil transit contracts and fees; the countries’ previous deal, which began in 2013, ends in mid-2017. The prior three-and-a-half-year contract gave Sudan fees and payments worth about $25 per barrel of oil transited, but that was negotiated when oil prices were high — which means that South Sudan is now receiving very little from its oil exports. With prices unlikely to go back up, the South Sudanese government will strongly push for significant reductions in per-barrel fees in what can be seen as a zero-sum revenue game between itself and its northern neighbor. However, both Sudan and South Sudan will be under considerable economic strain in 2016, and physical disruptions of oil supplies are not likely to occur until after the contract runs out — if they occur at all — because neither country can afford to halt supplies.

Security Concerns in East Africa

Sudan will continue attempting to bring rebel groups from South Kordofan, Blue Nile and Darfur into peace negotiations in 2016. Sudanese President Omar al Bashir was able to get the Sudanese Revolutionary Front — an alliance including the Sudan People’s Liberation Movement, the Justice and Equality Movement and other opposition groups — to agree to a six-month cease-fire that will end April 2016. However, further negotiations will progress slowly, and localized violence will remain. Finally, after breakthroughs in the Sudanese government’s improving relations with Saudi Arabia and others in the Arab world, as well as improving relations with the West, Sudan will continue warming to the outside world, including making contributions to Saudi-led efforts in Yemen. Khartoum will make the quickest progress in mending fences with Saudi Arabia and other Arab countries. Its progress with the West will remain slow, at least until al Bashir steps down due to concerns about human rights and his outstanding indictment by the International Criminal Court.

In Mozambique, the ruling Liberation Front of Mozambique, or Frelimo, and the main opposition Mozambique National Resistance party, or Renamo, will continue struggling to reach a comprehensive political agreement. Frelimo will continue to reject Renamo’s calls for full autonomy in the provinces where Renamo has the strongest support. Instead, the ruling party will work slowly toward a government that will include Renamo in political and economic decision-making. Renamo’s disarmament will remain elusive, which means the main opposition party’s low-level insurgency in the central belt of Mozambique, such as Sofala and Manica provinces, will continue sporadically targeting government troops, the police, mining facilities and infrastructure.

Somalia could hold elections in 2016. However, because of lingering insecurity throughout the country, free and fair democratic elections will be impossible. If elections are held, they will once again be limited to a representative vote through a selection of clan elders rather than a real popular vote. Such a selection of clan elders would be able to nominate a new parliament, which would in turn be able to elect a president. Although this would prevent the current government from embedding itself deeply into Somalia’s political structure, a representative vote would not achieve any of the objectives the country initially intended to reach by 2016 in terms of securing the country and normalizing its political process. Al Shabaab continues to be a threat, and despite its internal fragmentation the group has managed to continue challenging regional peacekeeping forces for territorial control. Al Shabaab will remain capable of mounting complex terrorist attacks deep in the heart of the capital city.

Annual Forecast 2016 is republished with permission of Stratfor.