Oil producing countries have experienced a rise in political risk, finds Aon’s 2015 political risk map, which focuses on emerging markets.
Only seven countries managed to reduce risk compared to last year, while the commodity price decline was a common factor in most of the 12 countries that were downgraded. Oil prices may be stabilising at around US$60 a barrel, but the impact of the steep price drop was felt across many producing countries outside the GCC, particularly in Africa and Latin America.
Among them is Nigeria, crowned as Africa’s biggest economy less than a year ago, but currently suffering from a fall in revenues from trade of oil and natural gas. “It’s time to adjust expectations about Nigeria,” Mike Liu, quantitative country analytics director at Roubini Global Economics, tells GTR . “The country’s assets look vulnerable”, continues his colleague Rachel Ziemba, emerging markets senior director. A lack of policy will affect growth even in resilient parts of the economy, they say, and spending cuts will hamper public investments – regardless of the result of the presidential elections to be held at the end of the month.