Macro-economic instability to drive business risks across West Africa – Predicts Control Risks

Macro-economic instability fuelled by low oil prices and global economic sentiment will continue to be the main driver of business risks across West Africa in 2017, according to a projection by Control Risks, a global risk consultancy.

It said governance improvements and the embedding of certain democratic practices and norms would limit the scope of potential for deterioration, but challenges will still persist.

“Cyber-attacks are advancing in nature. Businesses will become increasingly vulnerable until the impact of cyber risks on their operations and reputation is as well understood as the effects of political and security risk,” Control Risks said in its annual political and business risk forecast, “RiskMap 2017”.

Tom Griffin, Senior Partner for Control Risks West Africa, commented: “Macro-economic and domestic political changes are driving African nations to re-invent themselves in the hope of becoming Dubai or Singapore style commercial hubs.”

This, he said, would present lucrative new opportunities for business, but equally engender unknown risks and require a deeper understanding of the local political and regulatory environment.


Control Risks predicted that companies would pursue different strategies to protect value and seize opportunity in 2017, adding that many organisations will be defined as Arks, Sharks or Whales by their response.

“Arks will be defensive and focus on core businesses and markets. They will shed non-performing assets, reverse unsuccessful mergers, cut costs, and delay expansion. While particularly associated with mining and oil and gas due to the collapse in commodity prices, the Ark strategy also characterises retrenchment by retailers and re-shoring by manufacturers,” it said.

Control Risk explained: “Sharks are less risk-averse and will hunt for opportunities in new activities and locations. Financial services facing regulatory uncertainty and the rise of competing power centres in the emerging world are likely to take on risk to capture first-mover advantages in frontier markets or disruptive sectors.”

“Whales will take advantage of their deep pockets and cheap financing to engineer mega-mergers and monopolise markets. Their main risks are economic nationalists and competition regulators. Consolidation strongly characterises the technology sector, pharmaceuticals, and agribusiness, which have often arbitraged regulatory environments to gain dominant market positions,” it added.


On Ghana’s outlook, Control Risk said key macroeconomic reforms to address concerns over the high level of public debt, and investments in major infrastructure projects to alleviate the long-running energy crisis were expected to be the focus for the new administration, the New Patriotic Party (NPP), led by Nana Akufo-Addo.

Additionally, it predicted that anti-corruption would take a central focus including the introduction of legislation to tighten public procurement processes and to increase transparency in investment deals.

For Nigeria, it forecast that President Buhari’s rising unpopularity would place the APC under increasing pressure and without a bounce in the oil price, fiscal and sovereign risks will persist.

“Nigerian prospects will continue to be weighed down by the economic challenges of low commodity prices. Militancy in the Niger delta is expected to continue at the same pace as 2016,” it added.

In the case of Gambia and Guinea-Bissau, Control Risk predicted that economic and institutional reforms vital to attract investment would continue to be frustrated due to significant political instability of a number of incoming governments in smaller countries in the region.

Cote d’Ivoire

It said for Cote d’Ivoire, a continued focus on economic growth and an investor-friendly regulatory regime would sustain investor confidence and a rise in private investment.

“But longer term concerns around the stability of the business environment particularly regarding corruption and political succession beyond 2020 will persist,” it added.

Mr. Griffin said, “for businesses to succeed in this diverse region, it is important to take a threat- led approach and understand the unique and evolving risks that could impact the business in that specific market.”

Control Risks specializes in crisis management, security consulting, corporate investigations, political risk analysis, travel security, information security, forensics, security design, business continuity, maritime security, due diligence, fraud investigations and cyber security, among others.

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