Regime-change risks in Africa are growing as inflation accelerates, says Rencap

Inflation rates of 20% or more mean that per head GDP is likely to fall, which in terms increases the chances of political upheaval, the research argues.

In most global emerging markets in 2022, even falling GDP per head has little impact on political risk, because most markets are simply too wealthy and stable, Robertson says. That, he argues, does not apply in many parts of Africa. The continent’s low-income countries face more risks when there are destabilising external events, such as the Russia-Ukraine war, because food represents a higher share of the consumer price basket than in richer economies.

Further, while in richer countries packaging, labour and transport costs represent a large part of the final food prices paid by consumers, in Africa, the raw material costs of food makes up a higher share of the sale price.

For political change, Robertson uses the “Polity Score”