REVISIONS OF COUNTRY CATEGORIES FOR SHORT-TERM POLITICAL AND SYSTEMIC COMMERCIAL RISK

The review of country categories for the short-term political risk has resulted in changes of the risk classification for 15 countries. Six of them see their rating improved while nine countries undergo a downgrade. The most noteworthy changes are probably Côte d’Ivoire - which sees an upgrade following a gradual stabilisation of the political situation after a tumultuous period - and the downgrade for Nigeria, where the conflict risk has increased significantly given the escalating confrontations between government forces and the fundamentalist Boko Haram movement which has been responsible for a string of deadly attacks. A general strike in January against the elimination of fuel subsidies was ended after a week following the partial reinstatement of the subsidies. Tensions in Nigeria are thus clearly on the rise and the current downgrade could be followed by more action in case the situation deteriorates further.

NB: Political risk (classed on a scale of 1 to 7, with 7 being the highest risk) denotes any event occurring abroad that represents a force majeure (e.g. war, revolutions, natural disasters, shortages of foreign currency, etc.). Systemic commercial risk (scale from A to C, with A being the lowest risk) denotes the set of factors at country level that affect the ability to pay of all the debtors in a country, like an economic recession, an abrupt devaluation, high real interest rates, a background of widespread corruption, etc.

Changes in country categories for short-term political risk

All risk category downgrades entail an increase in the insurance premium for short-term political risk.



Changes in country categories for systemic commercial risk

Any worsening within the risk categories results in an increase in insurance premiums for commercial risk.



In 2011, ONDD country risk categories had changed as follows:

1. Short-term political risk (2011)



2. Medium to long term political risk (2011)



3. Systemic commercial risk (2011)