December 2022

Quick Bite

If conditions in 2023 remain similar to 2022, more African countries might face the unpalatable choice between defaulting on their debt and going hat-in-hand to the IMF with its stringent conditions.

The Year Ahead: Challenges and Opportunities

The Meat

The year ahead: Challenges and Opportunities

The year 2022 was eventful. For the first time since the cold war, the world came close to a potential conflict between two nuclear-armed superpowers. While this was averted, the Russia-Ukraine war continues unabated, with thousands of deaths and injuries as well as billions of dollars worth of physical destruction. Across the African continent, the pandemic and the war wrought economic havoc. Many countries remain on the verge of default and local currencies are at all-time lows. As 2023 approaches, what developments (new and existing) will the continent face? And what opportunities lie therein? This article explores four of those.


In 2023, 24 out of Africa’s 54 countries will head to the polls for presidential, parliamentary, regional, and local elections. While the quality and fairness of some of these elections are questionable, the potential for a change of baton presents opportunities and challenges. Among the upcoming elections, the polls in Nigeria and Libya could prove crucial. Nigeria, Africa’s largest economy and most populous country, faces daunting challenges.  These include an intractable security crisis (on land and offshore), a bloated fuel subsidy policy, and an unsustainable debt profile. The next government’s policy vis-a-vis the aforementioned challenges could unleash the country’s potential or threaten the country’s (and the region’s) stability.

Similarly, Libya, which hitherto ranked as one of the continent’s leading oil producers, has been rocked by repeated crises over the past decade. After multiple postponements, the country would hope to conduct a relatively fair and acceptable poll. If successful, it could help kickstart a period of relatively higher stability. This would positively impact the crude oil and natural gas markets, thanks to increased supply. Furthermore, an increasingly stable Libya would be a boon for Africa’s quest to rein in the lethality of non-state actors, considering Libya’s role as a major conduit for illegal weapons to these terror groups. Failure to conduct the elections could trigger the converse.

The Economy

The economies of African countries have been battered by the pandemic and the Russia-Ukraine war. Rapid hikes in food and energy prices increased countries’ debt, heaped pressure on their local currencies, and led to high internal inflation. More so, repeated hikes in interest rates in the US left many African countries, whose debts were denominated in an increasingly strong dollar, in a precarious position. As inflation in the US and EU remains high, interest rate hikes will likely continue into mid-next year, thus pushing African countries to the limit. 2022 was marked by some degree of tension between select African countries and their creditors. Kenya’s call for a restructuring of its Chinese loans was the first of what could be a continent-wide reality by 2023. If conditions in 2023 remain similar to 2022, more African countries might face the unpalatable choice between defaulting on their debt and going hat-in-hand to the IMF with its stringent conditions.


Worsening economic conditions, porous borders, and the free flow of illegal weapons helped strengthen existing non-state actors as well as birth new ones. From Mozambique to Nigeria, African countries saw the rise, and lethal efficiency, of rag-tag actors under various monikers. The rise of these actors could continue into next year as socioeconomic conditions worsen, and the black market trade of weapons from the ongoing Russia-Ukraine war increases.

Beyond the rise of these actors, a worrying trend is the rise of state-sponsored non-state actors. The most notorious among these are the Wagner Group (with close ties to the Russian Government) and M23 rebels (allegedly sponsored by the Rwandan government; it denies this). Wagner Group’s increased penetration across the West/Central Africa region as well as its close collaboration with various Junta in the region further complicates the desire for stability and democracy in these countries, with negative impacts on the regional economy. More so, the risk of border skirmishes/war between host countries and neighbouring countries is fast increasing. The recent war of words between Burkina Faso and Ghana over the latter’s extension of an invitation to the Wagner Group is concerning.


The year 2022 was marked by open geopolitical rivalry between the US/EU and China/Russia. While global attention focused on Ukraine and the Taiwan straits, these rivalries extend into Africa. Heading into 2023, the struggle is likely to get more serious as the US scrambles to regain its position on the continent amidst competition from China, Russia, and other countries. The Biden administration demonstrated its renewed commitment to the continent by promising over $53 billion in funding over the next three years; an average of $18 billion per year. This pales in comparison to China’s $160 billion loan to the continent in the past two decades. Nonetheless, the US funding, if it is delivered, helps strengthen Africa’s negotiating hand against China by providing a relatively credible alternative.

While competition among countries in providing funds for Africa is a welcome development, other forms of this geopolitical rivalry might be less palatable. Increasing interest in the continent’s wealth of mineral resources, especially those that are critical to green energy, threatens to draw the continent back to the old days of cold war proxy battles. China, which currently boasts a military base in Djibouti, is considering thirteen other countries for potential bases. Combined with the US’s multiple bases and Russia’s presence (through its Wagner Group), the continent might be crisscrossed by multiple geopolitical tripwires with potential consequences for stability and economic development.

A Silver Lining

There is no gainsaying the multiplicity of challenges facing the continent. From the rise of deadly nonstate actors, through economic uncertainties, and critical elections, Africa faces many decisions in 2023. However, notwithstanding the aforementioned challenges, the continent plays host to multiple opportunities across different sectors, including energy, mining, healthcare, and light manufacturing among others. An Africa strategy would require careful navigation of the aforementioned challenges while harnessing the continent’s potentials. We at Kwakol Research can help. Speak with us today!

What’s Next?

Low insurance penetration rates, high out-of-pocket payments, and the high copay for insurance policyholders expose millions of families across the continent to the risk of bankruptcy, death, or permanent disability. CNPL could help provide a lifeline albeit with limits. One of the earliest pioneers of this health financing model is DoctorPay whose partnership with Carbon seeks to fill this gap. However, considering the swathe of uncovered people across the continent, a huge market awaits new players. However, these players would be well aware of the risks facing the BNPL space in general and CNPL’s idiosyncratic risks.

Kwakol’s research team is at the forefront of trends in the continent’s leading sectors. Reach out to us today.

Crystal Ball

The Wagner Group’s increased expansion across the continent is making some countries jittery. The latest is Ghana, which has raised concerns over Burkina Faso’s alleged extension of an invitation to the private military company. We’re closely watching ECOWAS’s and the AU’s position on the Wagner trend.

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