Managing Risk in Africa

As a consulting firm operating in Africa, we regularly face the same question from our clients: “how do we manage investment and operational risks in Africa?”

If your organization is planning a strategic expansion to an African country, or you would like to expand your current operations from South Africa to other regional markets in the continent, you may find our services useful in order to manage your company’s exposure to risks associated with business, operational, and investment engagements in South Africa and other African countries within our portfolio.

Procana’s risk analysis and mitigation services are designed specifically for organizations preparing to invest or engage in business operations in Africa. Our risk analysis and mitigation services cover political, security, investment, and trade in South Africa, as well as in Namibia, Botswana, Angola, Mozambique, Kenya, Tanzania, Uganda, Ghana, and Nigeria.

The first step in your risk identification process should be a detailed understanding of the market you would like to enter. Most organizations have experience identifying industry specific risks associated with their industry; however industry specific risks must be identified in parallel with country specific risks. We recommend that your organization should conduct risk assessment and mitigation steps specific to your target market, and avoid regional generalization.

Procana’s risk mitigation services are designed specifically with our clients’ target market in mind. Procana’s risk mitigation services are designed specifically with our clients’ target market in mind.



Political Risk Mitigation Services

The first step in your risk identification process should be a detailed understanding of the market you would like to enter. Most organizations have experience identifying industry specific risks associated with their industry; however industry specific risks must be identified in parallel with country specific risks. We recommend that your organization should conduct risk assessment and mitigation steps specific to your target market, and avoid regional generalization.

Procana’s political risk identification includes forecasted analysis in political trends, influence of the opposition parties, ethnic disputes, general public pressure for reforms, border disputes, and political pressure from the international community.

As part of Procana’s overall country specific analysis for our clients, we consider the following major risk factors as part of our evaluation report:

  • Expropriation
  • Nationalisation
  • Licence Revocation
  • Taxation changes
  • Power purchase agreements not honoured
  • Currency inconvertibility
  • Credit risks

We believe that political risk assessment and mitigation strategies for projects in Africa are never to be considered a one-time activity, that is why we assist our clients with establishing an institutional political risk monitoring system within their organization designed to monitor and identify changes in the political environment of their target market on continues basis.

Procana consulting offers government engagement strategies and lobbying in South Africa, and other African countries within our portfolio, in order to mitigate your organization’s exposure to risk associated with long term engagements or Public-Private-Partnership arrangements



Operational Risk Mitigation Services

Africa is a logical destination for resource-based projects. If your organization is considering engagement projects in the resources industry anywhere in Africa, your company’s exposure to risk may not be limited to political risk factors. Procana Consulting offers risk protection services in environmental protection policies, human resources, customer relations, community relations, and supply chain management in South Africa and other African countries within our portfolio.

We offer detailed analytical review and hands-on risk mitigation services in:

  • Land based security, border instability, and factional conflicts
  • Maritime based insecurity and piracy
  • Supply chain, and time-to-market logistics
  • Business recovery plans for land based operations in remote locations
  • Safety management systems for security related instances


Investment Risk Mitigation Services

Africa is a logical destination for resource-based projects. If your organization is considering engagement projects in the resources industry anywhere in Africa, your company’s exposure to risk may not be limited to political risk factors. Procana Consulting offers risk protection services in environmental protection policies, human resources, customer relations, community relations, and supply chain management in South Africa and other African countries within our portfolio.

Direct investments in Africa can be affected by a wide range of political and operational risks. Procana Consulting offers a wide range of risk mitigation services in order to enable your organization to effectively manage risks associated with direct investment in South Africa and other African countries within our portfolio.

Our investment risk mitigation services include:

  • Risk Mitigation Instruments
  • Legal Tools


Risk Mitigation

Procana Consulting offers comprehensive consulting in financial instruments designed to systematically reduce our clients’ exposure to risk based on their target market and nature of investment projects in Africa. We provide consultation on financial instruments that can transfer your investment risks to creditworthy third parties, such as guarantors and insurers.

Procana’s main categories of risk mitigation instruments include credit guarantees, export credit guarantees, export credit insurance, political risk guarantee, and political risk insurance.



Legal Tools

Mitigating investment risks through legal tools can be effective if legal services rendered to your investment projects in Africa are provided by a reputable legal representative knowledgeable in your target African market and industry specific sector. Procana Consulting can assist your organization with selection of local legal representative in South Africa and other African countries within our portfolio.

Procana Consulting has a built a long term relationship with leading local African legal representatives experienced in due diligence review, contract negotiation, government legislation review, comparative study, and project finance.

We have detailed and up to date knowledge of business legal environment in Africa and can provide your organization with valuable advice on legal mitigation tools for your investment projects. For investment security, arbitration, and bilateral investment treaties we can provide your organization with consultation on:

  • UEMOA (West African Economic and Monetary Union)
  • ECOWAS (Economic Community of West African States)
  • ECCAS (Economic Community of Central African States)
  • EACJ (The East African Court of Justice)
  • EAC (East African Community)
  • COMESA (Common Market for Eastern and Southern Africa)
  • SADC (South African Development Community)