Ghana fails to make investment-grade

Political risk weighs on Africa's ratings - agency
JOHANNESBURG (Reuters) - Sub-Saharan Africa has become more stable over the last decade, but political risk will continue to affect investment prospects in the region, the international ratings agency Standard & Poor's said on Tuesday.

It said that while instability had diminished, poor governance remained a major challenge.

The international ratings agency Standard & Poor's The agency rates 13 countries in sub-Saharan Africa, the world's poorest region -- Nigeria, Mali, Madagascar, Benin, Kenya, Burkina Faso, Senegal, Ghana, Seychelles, South Africa, Botswana, Mozambique and Cameroon.

Only South Africa and Botswana are investment-grade rated.

"Politics are often personality-driven and succession is a key issue, with potential repercussions on policy continuity and reform agendas," S&P credit analyst Veronique Paillat-Chayrigues said in a statement.

Paillat-Chayrigues said fewer armed conflicts and more multi-party elections on the continent showed the advance of political stability.

"Nevertheless, the transition toward representative democracy is still ongoing, with serious credit concerns pending."

Some countries were clearly more of a concern than others, with South Africa and Botswana more advanced, while unrest in Nigeria's Niger Delta and presidential succession issues in Cameroon were particular problems, she said.

S&P added that the absence of opposition, flawed elections, and poor popular representation also affected progress toward electoral democracy.

"Although these issues are unlikely to compromise the greater stability of the rated countries in the short term, they show that institutions need to further mature to entrench stability in the long term," it said.

"Strengthening governance is in this respect a prerequisite."