- Business Insider Africa presents the top 10 riskiest African countries to do business in.
- This list is derived from Oxford Economics Africa’s report titled, “The Africa Risk-Reward Index.”
- The research is based on the assessment of 3 major factors.
Africa, with its different landscapes, cultures, and economies, provides a plethora of options for enterprises seeking to grow. It is, nevertheless, a continent with its own set of risks and challenges. While many African countries are economically growing and have become attractive investment locations, they still have substantial challenges for businesses.
A report by Oxford Economics Africa, an independent economic advisory firm, highlights the aforementioned point in its 2023, “The Africa Risk-Reward Index” report. The report examines the profits and pitfalls of polarization in each African country, African-led security interventions, and how African countries are financing for the future.
By accessing these three factors, the research is able to deduce the countries with the highest risk-to-rewards ratio, when it comes to conduciveness for the establishment of foreign businesses.
The risk scores for each country stem from the Economic and Political Risk Evaluator (EPRE), a joint subscription platform of Control Risks Oxford Economics Africa. Control Risks and Oxford Economics analysts rate a series of political and economic risk factors on a scale from 1 to 10, with 10 representing the highest level of risk.
Each political and economic rating is assigned a default weight, based on its significance in the country context and its potential impact on business. The individual political and economic risk variables are then combined, multiplying the rating by weighting, into the overall risk rating of a country.
With that said, below are the top 10 riskiest African countries to do business in.