Risk And Business In Africa

What are the risks of doing business in Africa? The main risks in everyday business are corruption, sovereign both cause political instability and legal address. There however are of course the standards risks of environmental, political and technological. These risks are on every continent. African region to region vary greatly, nevertheless when doing business is Africa there are many exciting opportunities plus rewards together with serious risks to be aware of. This means traders, investors and business owners today require the results of mathematical calculations that represent the likelihood of making or losing money, given the different possible futures on the main concerns.

So what is the dataset i.e. the African RISK?

Why do business in Africa? The rates on return in a mature home market can mean that investments spend may never be justified. The rates in a foreign lands could be greater for long-term growth. Though out history the drive has always been there to make your fortune else where and return home. It can be seen in the saying getting rich quick and then retiring early. However there are risks in this approach. This can be seen in the case of the expansion of massive trade developed with European countries as they expanded their territories in Africa, Asia and into the Americas in the 17th and 18th centuries. Risk came from pirates and war. An other example is how a graduate make want to make money fast by looking to working long hours in their capital city when they have grown up in the home counties. It can lead to burn out.

Africa has been used as a place to find opportunities with little regard to ethics. Corporate Social Responsibility (CSR) never a consideration. In the past it was gold, ivory and enslaved Africans traded and insured by European powers. Today the rapid development of Africa's infrastructure which is attracting investors. For a small business going to Africa to do business is like attempting to visit other planet. It is full of wonder but the magnitude of the challenges can be to great, however doing nothing is no longer an option if little profit is to made at home. So what can an organisation do to gain business in Africa in the digital world with lower risks?

An organisation needs accurate balanced information and to know what the risks are before entering into the markets of Africa. So the question is where does a business find this critical information? An example of data is maps, live images and AI Automation can be used in real time and it can be verified. The businesses that lend themselves to these types of activity monitoring for transparency and control from a far should be profitable in the African regions north, east, south and west.

When going into business with a new partner it is all about exhaustive checks and meticulous approach to legal agreements after negotiations this should never be abandoned any time soon when entering new markets. An apparently overwhelming desire of those to see new business can lead to ignoring what happens when you get paid and wish to transfer money. Money transfer to all region are changing on a daily basis. Countries in African and the Caribbean are coming online all the time like Lesotho, Morocco, AUE and Angola. However this is still a long way until we see a stable currency for west Africa such as the eco. So who is giving best rates on money transfer?

The true cost of sending GBP to GHS

What are the best business or industries to target for entry into Africa? A business provides solutions that solves the toughest of African challenges with innovative technologies is likely to be the best business to realise long term revenue in Africa. The sectors to look into are the one where contract risks are minimised. Legal address in Africa can be difficult to find so where a business can check off contracts as processes move forward to completion a competitive advantage can be achieved.

Which African regions or countries are best to enter and what are the risks? Of the 54 countries in Africa the following eight are seen as the places where the biggest business opportunities exist. Risks are focussed on the liking hood of it happening and impact of it occurring.

  1. South Africa
  2. Nigeria to come
  3. Kenya
  4. Egypt
  5. Ghana
  6. Ethiopia
  7. Morocco
  8. Algeria

Other countries to watch are Cote d'Ivoire, Angola, Senegal and Tanzania. See Mckinsey report

A break down of the areas that a business should be research into are risk, insurance, financing and business In Africa. Emerging markets are moving at different paces. The factors which will allow for a ROI are of real interest for an investor. Investors needs to know about the factors and their weighting.


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So what is a digital plan a for business in Africa? A plan for business in Africa should centre around the adoption of digital practises in communication to acquire real time data in the areas of industrial interest. Risks of concern can then be reduced. Nothing is risk free, it's about managing the risk.

Navigating opportunities and risks in Africa regions is a major challenge for small businesses that wish to enter these markets. The key is doing due diligence on risk and resilience. A business needs to have an extensive database of information to track claims trends. Today it can be integrated and automated with Insurance Risk Management Software.

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For flags see Africa - The World Factbook (cia.gov)

see https://www.gov.uk/government/collections/overseas-business-risk