Ecuador is a middle-income country facing many challenges, including significant political instability, declining socio-economic performance since the fall in oil prices in 2014-2015, and a macroeconomic situation vulnerable to exogenous shocks. To support a sustainable and less volatile development trajectory, AFD works in many sectors: water and sanitation, education, energy transition, sustainable urban development and support for civil society action.

Produced by AFD's team of risk-country economists, country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.

Emphasis is placed on developing countries, particularly in Africa, for which macroeconomic analyses are rare or infrequent. AFD seeks to complement existing production on the global economic situation, more focused on advanced economies and major emerging countries.

Find out more: Macroeconomic Analyses at AFD

Country-risk analysis is based on a close follow-up over a long period of time and rooted in a fine knowledge of local contexts. Cyclical trends, often highlighted in the news, are always examined in the light of structural trends and of the regional context in which they take place. The aim is to highlight country-specific macroeconomic issues while assessing risks against comparable time- and space-based trajectories.

Country-risk economists place the study of socio-political vulnerabilities, the growth model, the viability of public debt, external balances and the soundness of the financial system at the heart of their assessment, and give specific attention to countries' exposure to climate risks.

Beyond the cyclical upheavals (linked in particular to the volatility of oil prices) that led the country to fail several times over the last two decades, the Ecuadorian economy is characterized by many structural challenges. It is, relative to peer countries, uncompetitive and unproductive, which hinders the development of sustainable growth drivers. Dollarization, which has allowed macroeconomic stabilization, requires significant budgetary discipline to ensure the sustainability of public debt, which is regularly threatened. However, high political instability is holding back reforms and an economic paradigm shift – even as people’s expectations are high to improve a declining standard of living since 2015.

Download our publications on the macroeconomic situation of Ecuador:

• “Ecuador: A narrow path out of the crisis”, in MacroDev Panorama n°36, September 2021
• “Twenty years of official dollarization in Ecuador: A blessing or a curse?”, MacroDev n°31, July 2020 (also available in French and Spanish)

Contact:

• Benoît Jonveaux, country-risk economist, AFD

The fifth largest economy in sub-Saharan Africa, Angola is a strategic country for the AFD Group in Southern Africa. In a context of oil dependence and persistent socio-economic challenges, AFD is addressing the sustainable development priorities of its local partners, in particular by supporting improved access to water and electricity. The Group also supports Angola’s economic and financial transition by supporting macroeconomic reforms, the modernization of vocational training and higher education, and the strengthening of the entrepreneurial culture. It also promotes the development of a strong agricultural sector, generating more inclusive growth and less dependent on the vagaries of the oil sector.

Produced by AFD's team of country-risk economists, macroeconomic country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.

Emphasis is placed on developing countries, particularly in Africa, for which macroeconomic analyses are rare or infrequent. AFD seeks to complement existing production on the global economic situation, more focused on advanced economies and major emerging countries.

Find out more: Macroeconomic Analyses at AFD

Country-risk analysis is based on a close follow-up over a long period of time and rooted in a fine knowledge of local contexts. Cyclical trends, often highlighted in the news, are always examined in the light of structural trends and of the regional context in which they take place. The aim is to highlight country-specific macroeconomic issues while assessing risks against comparable time- and space-based trajectories.

Country-risk economists place the study of socio-political vulnerabilities, the growth model, the viability of public debt, external balances and the soundness of the financial system at the heart of their assessment, and give specific attention to countries' exposure to climate risks.

Angola is the second largest oil producer in Africa and its macroeconomic performance is very directly correlated with changes in the price of oil. The oil sector represents, depending on the year, nearly 30 to 35% of GDP, 95% of exports and 50 to 60% of government revenues. The fall in oil prices from mid-2014 has led to significant macroeconomic imbalances resulting in five consecutive years of recession. Since 2021, the situation has improved thanks to the sharp rise in oil prices, but the economy remains vulnerable to exogenous shocks. The efforts undertaken by the authorities to diversify the economic model are encouraging but remain insufficient to develop strong growth drivers, while socio-economic and development challenges remain a priority. 

Download our publications on the macroeconomic situation of Angola: 

• “Angola: An extremely volatile oil economy”, in MacroDev Panorama n°42, September 2022 
• ​​​​​​“Angola: A vital but constrained transformation of the economic model in the run-up to the 2022 elections”, MacroDev n°41, August 2022 (also available in French and Portuguese)

Contact:

• Benoît Jonveaux, country-risk economist, AFD

Despite several efforts to promote pro-poor growth, South Africa remains one of the most unequal countries in the world. While the country's colonial history and apartheid are known to have contributed to this inequality level, the nature and dynamics of its impact on society are yet to be fully understood.

Literature suggests that better institutions and lower level of inequality improve subjective wellbeing. However, evidence that examine how the interaction between these two variables explain variation in wellbeing is relatively scarce. This study will thus contribute to a deeper understanding of inequalities in South Africa. 

This project is part of the call for research proposals “Advancing the inequality agenda through collaborative research: identifying the priorities for a global Team Europe approach on inequalities”, launched by the Strategic Committee of the Research Facility on Inequalities. It is coordinated by AFD and co-financed by the European Commission, AECID and ENABEL. 

This research project has two main objectives:

• Explore how variations in governance (such as audit outcomes) across South Africa's district municipalities explain the variation in the well-being of individuals.
• Investigate how the interaction between the variation in governance across local government municipalities and inequality among individuals explains variation in subjective well-being.

To investigate the interactions between the quality of institutions and of the governance, the level of spatial inequality and the subjective wellbeing, researchers will use the National Income Dynamics Study (NIDS), a nationally representative survey of individuals across South Africa, which is repeated over five waves between 2008 and 2017. They will also use audit outcomes of local municipalities to proxy for the quality of governance.

You will find below the different research papers related to this project:

In progress

Contact: 

• Anda David, Research Officer, AFD