Highlights of Credendo webinar “Sub-Saharan Africa: new dynamics amid global turbulence?”

Credendo was grateful to welcome again a panel of experts to its May webinar dedicated to Sub-Saharan Africa. “With a long tradition and a strong expertise and risk appetite in the region, Credendo chose this topic to question the impact of the current political and power dynamics between nations, particularly on the side of critical raw material competition”, explained Kerlijne Van Steen, Deputy General Manager of Credendo – Guarantees & Speciality Risks.

The specific impact of the trade war on Sub-Saharan Africa

Louise Van Cauwenbergh, Senior Country and Sector Risk Analyst at Credendo, noted the squeezing impact that the sudden and drastic cuts in American foreign aid will have on funding options for the most vulnerable countries of the continent, such as Somalia, Liberia, Mozambique and Malawi. She also pointed out that the indirect impact could be more severe than the direct impact for countries whose critical sectors are built around a two-decades-old US-African trade preference agreement. However, a potential pivot towards stronger European trade relations and deeper intra-African economic integration could bring about opportunities.

Jonathan Schotte, Country and Sector Risk Analyst at Credendo, explained the privileged position of Africa to play off the USA and China against each other, stressing the fact that exports are dominated by resources rather than by manufacture. Furthermore, Jonathan highlighted the role of new regional actors, such as the Gulf countries, Türkiye and France, and touched upon security concerns in Sudan, the Sahel region, Ethiopia and the DRC.

The new critical minerals frontier

Our webinar’s keynote speaker, Robert Besseling, Founder and CEO of Pangea-Risk, focused on Africa as the new critical minerals frontier. What is really changing the outlook on graphite, lithium, copper, cobalt, tungsten and rare earths is that their projected demand will skyrocket over the next quarter century. As the three large economic blocs – China, the European Union and the USA – have different definitions for critical minerals, and competition between the USA and the EU is fierce, Robert examined the distribution of minerals across the African continent, the countries investing in the region, the potential collaborations, and stated Sub-Saharan Africa as the next, and potentially final, frontier to meet the world’s increasing demand for critical minerals.

Client insight

Finally, John Lentaigne, Global Head of Credit & Political Risks at Specialist Risk Group, shared his extensive experience of Sub-Saharan Africa. John confirmed the potential opportunities that trade tensions bring forth, such as supply chain diversification, boost in local production and export growth for countries like Kenya, Ghana and South Africa. He also emphasised the role of multilaterals, export credit agencies and private insurers in providing de-risking instruments.

Conclusion

Concluding the webinar, Kerlijne Van Steen noted the market’s growing interest for transaction and investment covering in Sub-Saharan Africa. She mentioned the high demand for commodities trading and pre-financing, as well as increased demand in the metals, mining and construction sectors. Kerlijne advised businesses to come well-prepared and to use the solutions and know-how of the financial and insurance markets.

Based on 35 years of in-house risk management modelling and knowledge, Credendo provides in-depth analyses on all countries in the world.

Credendo’s next webinar will be a hybrid event on 19 June. We will keep you informed about the programme.