Banks are likely to favour the African private sector over government-owned companies, says a risk consultant.

“The concern over the creditworthiness of governments facing cash constraints from fallen commodity prices means more of an emphasis on the private sector,” Jean Devlin, associate director for Africa at business risk consultancy Control Risks, tells GTR following the publication of its annual RiskMap, which plots global trends.

Devlin expects regional and international lenders will continue to dominate on the continent, with Chinese government lenders backing off: “As China re-orients its own economic model to more consumer-led growth, there is less competition from Chinese state-backed lending institutions,” she notes.

China’s declining demand for African resources has been a major factor affecting energy and commodity markets and – as a result – the coffers of African governments. According to the RiskMap report, the governments’ political inability to perform key structural reforms to diversify their economies and tackle raising debt levels in many Sub-Saharan countries is likely to limit growth this year. While economies remain dependent on commodities, a drop in energy or commodity prices can render debt unsustainable.

“The impact of the fall in commodity prices in resource-rich countries where governments are reliant on commodity earnings for revenue is the biggest concern for the trade finance market,” says Devlin. “It will affect demand for political risk insurance especially covering non-payment by state-owned companies, as well as currency risks given the devaluation pressures it brings,” she adds.

The overall outlook for trade on the continent is, however, looking up: “Non-oil sectors are expected to continue to perform fairly well even in badly-affected countries, such as Nigeria and Angola. Moreover, the impact of the price falls in other countries may well provide a boost in the form of lower energy costs, depending on their economic mix and ability to build up inventories during a period of low prices,” Devlin says.

The other good news for Africa is that the likelihood of resource-based conflict and piracy in East Africa is low for 2015, and even if terrorism remains a prominent issue, it is unlikely to have an impact on the continent’s major cities, the drivers of economic growth.

In the East African region, Mozambique shines as a particularly promising example of improvement in political stability. The country’s government had been engaged in a violent stand-off against the Mozambican National Resistance (RENAMO) guerrilla insurgence for the past two years. Since the elections in October last year, the situation has slowly stabilised: “The new government under President Nyusi still faces the difficult tasks of concluding a definitive political settlement with Renamo and coping with less favourable global environment for pursuing development of its offshore gas resources, but Nyusi has emerged as a more capable leader than many expected and a lasting deal with Renamo looks very likely, so overall stability looks much more assured,” says Devlin.