The prospects for countries in the Francophone West Africa region remain mixed and dependent to a large degree on the political will for reform. Gabon leads the way in many respects. President Ali Ben Bongo seems intent on reducing Gabon’s dependence on oil, having proposed an ambitious seven-year investment plan. Similar forces are under way in Cameroon, where President Paul Biya has announced that 2010 will mark the start of construction on several major infrastructure and mining projects. C ôte d’Ivoire could also be on the cusp of major economic revival, although this hinges heavily upon the elections. If the long-delayed polls are eventually held and pass relatively peacefully, a new era of investment and growth could be ushered in.

However, we recognise that peaceful integration is not guaranteed and a slide back towards war is a real possibility. We believe that something in between these two scenarios is the most likely outcome. Meanwhile, the political backdrop is similarly crucial in Guinea, where the country’s junta leader survived a recent assassination attempt. Far from being the catalyst for political meltdown, the incident appears to have generated a measure of short-term stability and cautious hopes for a transition to democratic rule. In this report we present three scenarios detailing how events may unfold over the coming months and years. Things are rather more calm in Equatorial Guinea. With long-standing President Teodoro Obiang having been re-elected to the presidency in November 2009, we see little in the way of change to the political status quo going forward. His leadership is likely to continue to be characterised by sparse democratic reforms and an inability to raise living standards sufficiently. The risks to his regime appear limited, although we warn that should Obiang fail to diversify the economy over the longer term and raise household incomes there is a risk of his leadership being challenged.

Finally, we highlight some important trends in external debt. The Republic of Congo reached the completion point in the Heavily Indebted Poor Countries (HIPC) scheme on January 28 2010, enabling it to qualify for US$1.9bn of debt relief. While this will result in a substantial reduction of the country’s external debt load, it is unlikely to alter its overall risk profile, in our view. Senegal, on the other hand, has added to its external debt load following the December 2009 launch of a US$200mn Eurobond. Although the issue was relatively successful, we warn that the government’s rhetoric on the direction of public expenditure is unlikely to inspire confidence among foreign investors, potentially raising the cost of accessing international capital markets in the future.