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The coups in Guinea and Sudan may signal broader political risk trends

By Stuart Ashworth and Sam Wilkin | November 1, 2021

The Guinean military's overthrow of President Alpha Condé in part reflects global conditions that could lead to instability in other fragile states.
Credit and Political Risk
The Future of Financial Services

Less than a year after winning re-election, Guinean president Alpha Condé was overthrown in a military coup led by a commander of the country’s special forces on 5th September 2021.

On one hand, the coup seems par for the course. Political instability in Guinea was a known risk. Condé’s October 2020 re-election had been engineered by a controversial re-writing of the country’s constitution and was followed by mass unrest in which perhaps 50 people died, as well as the jailing or exile of numerous leaders of Guinea’s political opposition.

Moreover, Guinea’s West African neighborhood has been rough since the pandemic: in 2020 and thus far in 2021, Mali had seen two coups, Chad one, and there was a failed coup attempt in Niger.

Taking such factors into account, even before the coup, Belgian export credit insurer Ducroire-Delcredere had rated Guinea at 6 out of 7 for expropriation risk, and 5 out of 7 for violence risks (where 7 represents the highest possible political risk level).i On the 2021 edition of the Fragile States Index produced by Canada’s Fund for Peace, Guinea ranked 14th from the bottom – worse than Iraq and Libya and only one place better than Haiti (again, prior to the coup).ii

In sum, the political risks in Guinea were hard to miss. Previous political transitions in Guinea have been associated with acrimonious disputes over control of the country’s mineral wealth, including alleged expropriations of mining assets. There was some optimism associated with the election of President Condé in 2010; he was Guinea’s first democratically elected leader. However, Condé soon took actions that led to bitter international legal disputes and allegations of corruption against both the government and foreign mining investors.

While the leaders of the recent coup have announced that all international mining contracts will be respected, foreign investors will worry, given the country’s history of disputes following transfers of power. Moreover, while a new government consolidates its authority, there is the threat of a countercoup from other groups within the military, social unrest, or even international military intervention. Guinea has the world’s largest reserves of bauxite, a crucial ingredient in aluminum production, and prices spiked following the coup announcement.iii

A sign of broader trends?

The coup in Guinea is more than “just another” struggle for control of an institutionally weak, resource-rich Sub-Saharan African nation. It is potentially a bellwether for broader trends which could lead to elevated political risks for other investors – particularly in the mining sector, but also for companies operating in fragile states more generally:

  • Post-pandemic austerity. The pandemic has forced fragile states into budget-cutting, and austerity is associated with political turmoil. Efforts to cut budgets have been associated with spectacular incidents of social unrest, such as the gilets jaunes movement in France and the violence in Chile in 2019. Academic research has indicated that austerity is also associated with a higher frequency of military coups in Latin America – soldiers may tend to dislike having their budgets cut just as civilians do.iv The coming years are likely to be ones of significant austerity and associated instability for countries that have taken on debt during the pandemic, not only in West Africa but worldwide. Our own calculations, based on IMF data, suggest that cuts in government spending in Guinea in 2021 were, on a per-capita basis, among the 30 harshest in the world, out of the 152 countries for which data are available.v
  • Resource competition. Much has been made of strategic competition between China and the West, and of the potential that China could use its lending and infrastructure projects in Africa to gain political leverage. (Our recent report identified “strategic competition between Chinese and Western companies” as one of the top risks facing global mining ) More prosaically, whether countries are “strategic competitors” or not, the rise of new markets for mining products has often led to elevated political risks.
  • Resource nationalism. Mining commodity prices have recovered sharply after the pandemic. In the months prior to the coup in Guinea, prices for iron ore had touched highs exceeding even their 2010-2011 peaks (Guinea is home to one of the world’s largest deposits of iron ore).vii Whether resource wealth motivates efforts to seize political control is a question hotly debated in academia. Regardless of motive, higher commodity prices have tended to be associated with “resource nationalism” – governments seeking to gain larger shares of profits, whether through renegotiation of contracts or even outright expropriation.viii

While we cannot identify any one of the above trends as the primary cause of the recent events in Guinea, it is plausible that all three trends were contributing factors – austerity wrought by the pandemic; growing presence of Chinese companies in Guinea; and surging prices of iron ore.

In the years ahead, these factors will impact many other countries as well. Guinea, given its inherent fragility, may well prove to be a bellwether for political risks in other places. The coup that occurred in Sudan on Monday 25 October underlines this point.

Risks for investors

Whilst this latest chapter of Guinea’s history is certainly worthy of comment, sadly it is not a unique event in the current climate, and nor will this be the last emerging market incident we see in the short term. The gradual move away from global integration towards populism and protectionism has been accelerated by the COVID-19 pandemic.

Given this trend is likely to continue for some time to come, each company should proactively look to understand the range of risks they (or their overseas operations) face. For each risk they should identify the potential causes, the possible consequences and the various mitigation strategies available. These risks can then be looked at through a firm’s risk tolerance lens, to decide which risks they are happy to keep, and which risks they prefer to transfer. Here at Willis Towers Watson we help to protect our clients by arranging and placing Political Risk Insurance on their behalf. Effective insurance solutions mean that, even if a company’s key operations are impacted by a politically driven change, it does not need to become a politically-driven corporate crisis.

Please join us at 1:00 p.m. ET (Canada)/EST (US) on Thursday, November 18, for an engaging webinar on how post-pandemic austerity, rising mining prices, and strategic competition between countries are impacting political risks in the mining sector. Register now.


i, accessed June 2021



iv Voth, Hans-Joachim, Tightening Tensions: Fiscal Policy and Civil Unrest in Eleven South American Countries, 1937-1995 (February 28, 2012). Available at SSRN:

v Data on government spending as a percentage of GDP from the IMF Fiscal Monitor and World Economic Outlook databases. Data on GDP are taken from the World Economic Outlook, and data from population are taken from the World Bank World Development Indicators. These data are used to calculate changes in government spending on a per-capita basis for 2021 vs 2020. See;;



viii Sergei Guriev & Konstantin Sonin & Anton Kolotilin, 2007. "Determinants of Expropriation in the Oil Sector: A Theory and Evidence from Panel Data," Working Papers w0115, Center for Economic and Financial Research (CEFIR),; Roderick Duncan, Price or politics? An investigation of the causes of expropriation, Australian Journal of Agricultural and Resource Economics, Volume50, Issue1, March 2006, Pages 85-101,


Head of Broking and Market Engagement & Head of Credit and Political Risk for Corporates

Stuart Ashworth is Head of Credit and Political Risk Insurance for Corporates and Head of Broking and Market Engagement for WTW's Financial Solutions team. Prior to this he spent nine years in Singapore, looking after WTW business covering Singapore, Hong Kong, Japan and Australia.

Director of Political Risk Analytics, Financial Solutions

Sam Wilkin is WTW's director of political risk analytics, meaning he constantly monitors emerging and existing politically-linked threats to companies. He also leads WTW's annual political risk survey.

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