Relatively peaceful election proceedings in Kenya and Angola this month have provided a lift to investor sentiment. But with the respective losing presidential candidates challenging official results through the courts, the risk of violence lingers. If and when uncertainty lifts (for example with legal challenges dismissed and streets remaining calm), another bout of the relief rally in bond markets is likely to follow. Nonetheless, incoming administrations will still face difficult economic challenges. In Kenya, we think that policymakers will struggle to put the public finances on an even keel. And while high oil prices have supported an improvement in Angola’s debt trajectory, the government will have to contend with the longer term task of reducing the economy’s oil dependency.
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