Ghana’s operational risk worsens, ranked 16th in Africa 

By: IGNEWSS

The Economist Intelligence Unit’s recent Operational Risk Outlook has placed Ghana among 16 out of 51 African nations that experienced a decline in operational risk between late 2022 and mid-2023.

This decline is primarily attributed to a deterioration in the macroeconomic risk subcategory.

The UK-based firm highlights that these worsened scores are indicative of the adverse effects of escalating domestic consumer prices on businesses’ profit margins. Additionally, the implications on exchange rates and monetary policies are noted as broader concerns.

Despite facing challenges posed by the Russia-Ukraine conflict and the lingering impacts of the COVID-19 pandemic, the macroeconomic risk subcategory remains relatively well-rated across the region, averaging a score of 43, equivalent to a C rating. This is largely attributed to the region’s robust economic growth driven by expanding populations.

On the flip side, positive risk outlooks have been observed in 11 of the 51 African countries, including nations such as Tanzania, the Central African Republic (CAR), and Ethiopia. These improvements are attributed to country-specific factors, such as Ethiopia’s stabilization efforts following two years of civil war and the CAR’s successful negotiation of an International Monetary Fund deal in April 2023.

The report also underscores a notable concern regarding the potential for financial sector distress. This is attributed to the combination of high and escalating public debt levels and comparatively limited levels of banking supervision and autonomy within the region.

In summary, the Economist Intelligence Unit’s Operational Risk Outlook sheds light on Ghana’s position among African countries facing increased operational risk due to macroeconomic challenges. However, the broader regional economic growth and pockets of improving risk outlooks in certain countries contribute to a complex operational risk landscape across the continent.

SOURCE: norvanreports

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