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Risk analysis and prevention of African trade

ABigBizApr14, 2020News Leave a Reply

Africa is the area that most countries are agricultural-orieted. So for the  pesticide trade, Africa is a fast growing large market. In recent years, Chinese pesticide companies increase the trade practices in the African market , but most of them still lack of understanding of the business risk in Africa.In the risk of area, Africa is still in the world's highest levels of risk. Politically, the overall current political situation of African countries is good  but there are some countries still not stable and influence the continuity of policies. Some people have complex emotion to the foreign investment especially investment in the resources industry, and most of the local residents' hostility feeling to the foreign worker increases because of the prevalence of  high unemployment.

NigeriaNigeria is the largest economy in West Africa with the largest population in Africa and rich natural resources. As an important country of oil producer and exporter in the world, Nigeria plays an important role in the international economy.Politically, Nigerian political situation remains stable, continuing to promote the democratic process , but the stability of the political system is weak. Nigeria's economic development is currently facing multiple risks from domestic and international market. Domestically, the adjustment of national policies lead to the occur problems of social unrest situation, inflationary pressures increase and other issues. Internationally, with the world economic downturn, the situation of weak demand and the decreasing international oil prices is a severe external challenges to Nigeria whose economic growth , exports and fiscal revenues is highly rely on oil industry.Although Nigeria encourage to attract foreign investment by a series of tax incentives, but the investment environment remains need to be improved. But in the long run, the huge consumer market, the improvement of business and investment environment caused by the gradually stable political situation, and radiation effects on neighboring countries, have made the potential of Nigeria's economic development and investment largely increase.In recent years, with the rapid expansion of bilateral economic and trade exchanges, the fraud aim at Chinese enterprises and citizens in Nigeria,  kidnapping and other incidents often occur. Therefore, Chinese enterprises that want to invest in Nigeria need to strengthen the research and alert, especially the awareness of the risk of financial crime and social security.

KenyaKenya is the largest economy and trading center in East Africa and it is one of the best economies in Africa. Kenya's economic growth severely constrained by natural conditions and the external environment, especially the impact of bad harvests rainwater on agriculture and political stability, the economic cycle and other factors on Kenya's tourism industry will largely influence the economic performance of Kenya.In recent years, the operational risk and security risks in the investment climate in Kenya has increased which mainly show in the poor implementation of laws and policies; low administrative efficiency; high domestic crime rate and so on. In addition, there is different treatment exits in the internal and foreign enterprises in terms of the investment capital and the tax system.Thus, in trade with Kenya, the following points should be noted: First, although the local people of Kenya favorite cheap and durable Chinese low-grade commodity, the phenomenon of payment defaults often occurs because of the affordability. Chinese companies can require a reputable international bank for payment procedures by the Kenya businessman. Second, Chinese companies should emphasis on integrity and the product quality. Third, Chinese enterprises must strictly comply with environmental laws in Kenya and consciously do environmental work because Kenya attaches great importance to environmental protection. Pay fully consideration on the spending on environmental protection in the investment budget.

GhanaGhana, known as the African country's economic structural adjustment "model ", becomes the development leader of West African region. Ghanaian economy has been developing rapidly in recent years. Ghana is a relatively stable country in West Africa. Apart from the above two reasons, the rich resources enable Ghana to become the first choice for many foreign investors in sub-Saharan.There are some notes that Chinese companies should pay attention to when do the business with Ghanaian businessmen: First, comprehensive analysis and study the capacity and potential of the Ghanaian market with the bilateral trade data with Ghana before beginning of the Ghana Trade. Second, criminals often take advantage of the so-called tender or procurement documents of Ghanaian government and do the illegal fraud. Third, in a foreign country , people should enhance the awareness of do as the Romans do and behavior themselves consider to the taboo and customs.

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