Africa’s risky investments

Finance

Somalia, the Democratic Republic of the Congo and Zimbabwe are countries that carry "extreme risks for businesses", according to a report issued this week by corporate risk intelligence firm Maplecroft.

Maplecroft ranked 175 countries according to 26 non-financial risks faced by international business. These included terrorism, conflict, macroeconomic risks, rule of law, resource security, vulnerability to climate change, natural disasters, human rights violations, poverty, and risks from pandemics and infectious diseases.

Regarding the poorest-performing countries, Maplecroft said: “Several of these countries, including the DRC and Nigeria, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.”

High-risk countries also critical to corporate supply chains include the Philippines, Indonesia and India. “Each of these countries poses specific challenges to business that require monitoring,” the firm said.

The countries rated least at risk in the index were predominantly Scandinavian, with Norway, Iceland, Finland, Sweden and Denmark setting the standard for the rest of Europe.

Professor Alyson Warhurst, chief executive of Maplecroft, said: “The key to understanding and managing global risks is to view them as interdependent. Increasingly, conflict is triggered by issues relating to poverty and water security, whilst threats to government stability emerge from energy scarcity.”