Political uncertainty a business risk for Southern Africa – Control Risk
Political uncertainty through transitions and instability are among the key risks for businesses in southern African in 2018, according to Control Risk (CR), a company that specializes in global risk consultancy.
Senior Partner for Southern Africa at Control Risks, George Nicholls, said 2018 will see continued uncertainty around political leadership in southern African markets.
“The transitions in Zimbabwe and Angola in 2017, elections in Mozambique in 2018, and factionalism within South Africa’s ruling African National Congress (ANC) once again remind businesses in the region of the importance of gaining a clear understanding of the impact of such uncertainty on their risk environment,” he said.
According to Nicholls, the firm have identified that political instability in Southern Africa will be a risk as 2018 will see a continuation of divisions within the ANC following the December 2017 elections of a new party president.
Control Risks said that competing factions and the possibility of a split in the party will drive policy uncertainty and political instability with President Jacob Zuma likely to step down before the end of the year.
The firm further advised that the political transitions and general change, where Zimbabwe’s President Robert Mugabe has stepped down, Angola’s President Jose Educardo do Santos has been replaced by Joao Lourenco and Mozambique’s President Filipe Nyusi consolidating his authority.
“Therefore anticipating and preparing for these transitions will affect business in essential for success in 2018 and beyond,” he added.
“The reputation risks in noisy political environments will be a problem because 2017 saw a series of high-profile corruption scandals in South Africa. These were evident in a mass email leak showing frequent improper communication among senior government officials, politically connected individuals and private business interests,” the firm said.
Meanwhile, Control Risks have confirmed that large scale cyber attacks against infrastructure will be a risk because in 2017 was the year of major but random disruptive attacks.
“This year could see the likes of WannaCry, NotPetya and BadRabbit recur, but in a more powerful, targeted and disruptive manner and national infrastructure systems are particularly at risk, “ they added.
Meanwhile, the firm is of the view that new threats will affect Mozambique where major final investment decision has been taken on liquefied natural gas projects in northern Mozambique, signaling a likely increase in foreign investment.
The African continent, businesses might see the negative impact of a potential renewed debt crisis coming, but nonetheless ongoing reforms and government recognitions of these issues will drive improvements in 2018,” the consultancy firm concluded.
Caption: Senior Partner for Southern Africa at Control Risks, George Nicholls.