Risk assessment says something about us
Namibia has just received a top ranking in the AON Plc Political Risk Map published quarterly by this company based in London in the UK. AON Plc describes itself as the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services.
This may sound like a clip from a Bond movie or it may just be the type of risk-speak adopted by companies that are active in measuring degrees of political risk in many countries world wide. Key risks are exchange transfers, legal and regulatory risk, political interference, political violence, sovereign non-payment and supply chain disruption. Multi-nationals often use AON political risk to assess whether or not to invest in a country.
As we all know, measuring political risk can be a dangerous undertaking in Africa, and many governments are not too keen to have an expert actually placing a benchmark value on what it [the government] perceives as a stable and prosperous nirvana. Governments usually only warm up to this type of ranking, either when it portrays them very favourably, or when the government is a paying client of the institutions that conducts the ranking process.
In our case, I do not know if our government is a paying subscriber to the extensive range of AON risk assessments, like we are to Fitch for our ratings, but AON holds a sufficiently high esteem of us to tell any prospective investor that, according to their gospel, political risk in Namibia is negligible.
Which is all the more reason why we must be impressed with ourselves to come out amongst the top twelve countries across the more than 160 monitored. The outcome of their endeavour is that AON Plc publishes a range of risk benchmark for the countries in their profile. This information is then subscribed to by thousands of clients across the globe who all require some sort of ranking before considering to invest in a specific country.
Of its services, the AON website proclaims, “Our key advantage is our broad view of two of the most important issues in our economy today: risk and people. With an employee base of 65,000 people working in more than 120 countries, we can anticipate how changes in one sector impact another.
This sounds very impressive. I have to admit I have only vaguely noticed AON’s maps in the past. Until the Botswana government dropped me a note earlier this week asking me if, by chance, I have noticed how high Namibia features in the ranking map. This did not impress me for the only motive the Botswana government has in bringing this to my attention is to make me understand that they got an equally good rating too. Three cheers for the general.
Nevertheless, the AON Political Risk Map tells the rest of the world that Namibia is one of the world’s safest destinations for tourism, business and investment. Namibia is considered to have almost zero political risk, or civilian unrest, or acts of terrorism.
Along with Namibia, the top dozen global performers, who are collectively placed in the AON category 1 for negligible risk, are neighbouring Botswana as well as Australia, Denmark, Finland, Iceland, Japan, Luxembourg, New Zealand, Switzerland, Tuvalu and Uruguay. Is it not nice to know one’s Heimat ranks higher than the Teutonic homeland.
Namibia and Botswana’s high global rankings come despite the fact that Africa as a whole, along with the Middle East, is rated as the world’s most unstable region.
But to me as an analyst that is not unduly influenced by a distorted love of party, it is no surprise that we and our neighbour are highly regarded by a reputable risk assessment company. I have travelled Africa extensively and it does not take pink spectacles to see for oneself how extra-ordinary and out of the pattern, we and Botswana are.
And this positive image is not restricted to political risk or perceived threat of terrorism. The same reason that makes Namibia an attractive tourist destination, has also turned Walvis Bay into a regional import hub. Honesty, reliability, political stability, near zero threat of militant action against the government: these are all underlying elements of stability which many other governments are putting much effort and money into, to promote. With us, it’s part of the fibre.
Despite the fact that I am slightly despondent sometimes when I see the new upcoming generation of fatcats, trying everything to enrich themselves, not through ingenuity or industry, but by robbing the state of its resources, I still maintain that generally we are a solid bunch. Just cross the border north, and experience what a country is like when corruption and graft have become part of everyday culture.