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EXX Africa, a specialist intelligence consultancy headquartered in Johannesburg, is rebranding as Pangea-Risk and expanding its country coverage to the Middle East, GTR can reveal.

Since its launch in 2015, EXX Africa has specialised in political and economic risks across Africa exclusively. Pangea-Risk will cover 14 additional countries across the Middle East, including Turkey, Israel and Iran.

Executive director Robert Besseling says Middle Eastern countries have increasingly shown an interest in taking a greater role in Africa in terms of trade, investment and debt.

“In trade, there are a number of key motivations,” he tells GTR. “There is oil and gas, and then metals, but also food security. The pandemic, particularly the lockdowns and the disruptions to trade, have demonstrated to many Middle Eastern countries the importance of food security.”

“Many of the Middle Eastern countries, particularly the smaller gulf states, have a real interest in securing longer-term trade deals with Africa. That’s been a real motivation for the shift in trade patterns.”

Besseling adds he is seeing an increase in project finance, particularly in agriculture and energy, coming from the Middle East into Africa.

In terms of debt, he says a growing amount of Middle Eastern money is being used to fund government bonds as well as commercial lending.

“There are geopolitical reasons behind this,” Besseling says. “A lot of countries in Africa have not been able to secure international debt or to get to bond markets; Saudi Arabia, for example, has been supplying huge credit lines to some of these countries.”

Many of the country risk patterns are also similar across much of Africa and the Middle East, such as the risk of civil unrest and a significant exposure to fluctuations in oil prices.

Shifting relations between the two regions will also have an impact on China, whose Belt & Road Initiative (BRI) has already facilitated enormous investments across the African continent.

“BRI is very much focused on creating hubs in the Middle East which will interconnect with Africa,” Besseling says. “However, at the same time, there’s also been a real shift within Africa in terms of thinking they have to diversify away from Chinese money alone.

“That’s been illustrated by a drop in demand from China for key metals and crude oil products, and a drop in investment from China in Africa over the course of this year. More African countries are now keen to diversify their trade and investment origins.”

As of press time, Pangea-Risk is expected to launch on December 1.