Iran’s geopolitical role, geopolitical risks affecting investment managers, protests in Nigeria and more

US-China dynamics will be a focus in Washington

The US Congress was in recess for much of August and returned to Washington on 9 September. The House of Representatives may hold a long-expected “China Week” in September, which would be focused on security issues related to China. While it remains unclear what legislation or activities may be considered, it could include a House vote on the BIOSECURE Act. Separately, the Biden Administration is reportedly planning to release in September proposed rules to restrict Chinese connected vehicle technologies from being used in US cars. And the tariffs on certain strategic products that President Biden announced in May⁷ could come into effect this month. Beijing is likely to react to any actions taken by Washington, but the specific nature of their response is uncertain.

Executives should closely monitor Washington for heightened rhetoric and activity in this arena leading up to the November elections. The perceived over-reliance of the US on China for certain advanced manufacturing capabilities is likely to continue to drive bipartisan US policymaker support for “de-risking” from China and could lead to new products and sectors labeled as “strategic” for national security. Executives should continue to evaluate portions of their business that may be considered as strategic now or in the future and evaluate potential diversification opportunities and risk mitigation strategies.

For more information, contact Courtney Rickert McCaffrey.

Nigeria protests could lead to short-term operational disruptions

Nigeria is grappling with widespread protests throughout the country. Protest action was at its peak in early August triggered by soaring inflation arising from a series of economic reforms⁸ following President Tinubu’s one-year anniversary in office. This highlights the challenge of balancing the benefits of long-term economic reforms with the cost of short-term hardship. The post-pandemic economic slump and limited fiscal space for governments to boost economic activity, coupled with a large youth population and high unemployment rate, make the Sub-Saharan African region particularly vulnerable to such protests – with Uganda and Kenya having had protests in July 2024.

The ongoing protests pose risks to business continuity across multiple sectors in Nigeria, particularly retail, manufacturing and services. Nigeria's economic outlook remains challenging, with inflation and restrictive monetary policies constraining growth. Despite efforts to increase oil production and improve reserves, operational disruptions and theft could exacerbate supply chain challenges at a time when exchange rate volatility and high inflation are impacting business activity and consumer spending. Companies in various sectors, including energy, may face potential policy shifts such as fiscal and subsidy reforms as the government seeks to stabilize the situation.

For more information, contact Angelika Goliger.

Bangladesh political instability creates domestic and geopolitical uncertainties

Following widespread civil society protests fuelled by perceived injustices and economic strain, Prime Minister Sheikh Hasina of Bangladesh resigned⁹ on 5 August, ending her 15-year rule. An interim government, led by Nobel Peace Prize laureate Mohammad Yunus, has been formed with the backing of army leaders. A new election timeline is being negotiated to include Hasina’s Awami League party and the leading opposition, Bangladesh National Party (BNP). Concerns around future political and religious suppression linger.

The garment industry – which accounts for nearly 80% of the country’s exports – faces ongoing operational and trade disruptions. Infrastructure projects, including those in the power and water sector, will likely face delays and future investment risks may be elevated. The need for international financial support to alleviate the economic crisis is likely to make Dhaka’s geopolitical relationships with both India and China more complex. While the immediate policy environment is expected to remain stable, the potential for economic and governance reforms after the election is held necessitate ongoing political risk due diligence for existing and future investments.