15 African Countries with the Highest Business Risks in 2023


In this article, we will take a look at the top 15 riskiest African Countries to do business in 2023. If you want to skip our detailed analysis, you can go directly to Top 5 Riskiest African Countries To Do Business in 2023.

The large youth population in Africa shows promising signs of strong economic returns. Significant business potential could be explored in economic zones like South Africa, Nigeria, and Kenya with consistent investment. With that, let’s discuss the business outlook for Africa.

Is It Risky To Do Business in Africa?

On August 11, S&P Global Ratings positively assessed Nigeria’s credit outlook. Previously ranked as negative, the credit outlook was declared stable by S&P. As per the report, the primary reason for the upgrade is the ambitious policies of the new government. Not only did the president of Nigeria, Bola Tinubu, scrap fuel subsidies, but he also suspended the Central Bank of Nigeria (CBN). According to the report, the new cabinet’s primary objectives are economic growth and international investment. The report further suggests that a positive credit outlook will significantly attract investors to the country, fostering long-term economic growth.

Similarly, on September 5, Reuters reported that, in August, the private sector in South Africa expanded for the first time in six months. According to the report, the S&P Global South Africa Purchasing Managers Index grew to 51.0 in August from 48.2 in July. Moreover, the report suggests that the private sector output grew significantly, supported by stable demand conditions. Such indicates that consumer confidence in the region may rise, calling for a rise in business development and investment. You can also check out some of the safest countries in Africa to do business.

However, on October 5, Reuters reported on the decline of the South African rand against the US dollar. On Thursday, the African rand appeared 0.4% weaker than its previous close. The rand is particularly sensitive to international factors, restricting the willingness of investors to do business in the region.

While the private sector is blooming in the region, economic uncertainty in the region limits the growth potential that could otherwise be explored with adequate investment. Some of the fastest-growing cities in the world lie in the African region and point to the possibility of business growth in the future. The growing population in Africa and high economic growth prospects may provide attractive investment opportunities to venture capitalists. Check out some of the fastest-growing cities economically.

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Successful Names in The African Gold Mining Industry

The gold mining industry drives significant growth in the African region. Some of the prominent names in the gold mining industry include Gold Fields Limited (NYSE:GFI), Sibanye Stillwater Limited (NYSE:SBSW), and Harmony Gold Mining Company Limited (NYSE:HMY).

Gold Fields Limited (NYSE:GFI) is a leading gold mining company in South Africa. The company is driving economic growth in the region due to its increased investments in sustainability. On October 2, Gold Fields Limited (NYSE:GFI) reported that the company is entering a five-year credit facility agreement worth A$500 million with a syndicate of 10 banks. The amount will help the company build on its sustainable development and corporate goals. These goals propel the inclusion of women in the workforce from an existing level of 23%, an increase in the use of recycled water, and a thorough investment in renewable energy projects.

Sibanye Stillwater Limited (NYSE:SBSW) is a mining and metals processing group based in South Africa. Investment in research and development is key to Sibanye Stillwater Limited (NYSE:SBSW). On July 13, Sibanye Stillwater Limited (NYSE:SBSW) reported on the launch of the Wits Sibanye-Stillwater Innovation Bridge. The company funded the project in partnership with the University of the Witwatersrand, Johannesburg (Wits). The program invests in bright minds, allowing them to execute unique and innovative solutions. The business solutions or projects fall under digital marketing, fintech, engineering, and mining, among others. Since 2014, Sibanye Stillwater Limited (NYSE:SBSW) has funded studies for over 500 students at the University of the Witwatersrand, Johannesburg (Wits).

Harmony Gold Mining Company Limited (NYSE:HMY) is a gold mining company engaged in gold exploration, extraction, and processing. The company is based in South Africa. The company is one of the major contributors to the industry and, therefore, holds a certain degree of responsibility towards society. On August 15, the company reported the launch of 30 megawatt solar photovoltaic plants in the Free State. These plants are expected to provide 70 gigawatt hours of renewable energy to Harmony’s Free State. By December 2023, Harmony Gold Mining Company Limited (NYSE:HMY) will start with the project’s second phase, adding 137 megawatts in renewable energy.

Doing business in Africa may not be a stroll in the park. Economic and political conditions sometimes significantly deter business success rates in the region. With that, let’s discuss the top 15 riskiest countries in Africa to do business in 2023.

15 African Countries with the Highest Business Risks in 2023

Top 15 Riskiest African Countries To Do Business

Top 15 Riskiest African Countries To Do Business Our Methodology

Since we are studying the “riskiest” countries to do business, we would want to include countries offering a higher reward, regardless of the risk, even if the risk is very high. Hence we compiled the list of countries with the highest reward and then took their risk scores. We sourced the country-wise reward and risk scores from the Oxford Economics Report. From the source, we shortlisted countries with high reward and risk scores in two separate lists. The first 15 common names were selected and ranked. The list is in ascending order of the reward score, and the risk score is our sub-metric. Our ranking is relative, meaning that a country could be an objectively safe place for business but is relatively risky compared to other countries in the African region.

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It is to be noted that the value for the reward and risk score is out of 10, with 10 being the highest. According to the Oxford Economic Report, the reward score combines medium-term economic growth forecasts, economic size, economic structure, and demographics, and the risk score is an amalgamation of the individual political and economic risk variables. These variables are then combined to calculate the overall risk rating of a country.

Top 15 Riskiest African Countries To Do Business

15. Ghana

Reward Score 2023: 4.39

Risk Score 2023: 5.85

According to our methodology, Ghana is among the riskiest countries in Africa to do business. Ghana reported a risk score of 5.85 as of September 2023, up by 0.61 from September 2022.

Gold mining is a prominent and profitable sector in Africa. Gold Fields Limited (NYSE:GFI), Sibanye Stillwater Limited (NYSE:SBSW), and Harmony Gold Mining Company Limited (NYSE:HMY) are among the largest gold mining companies in the region.

14. Cameroon

Reward Score 2023: 4.39

Risk Score 2023: 6.53

Cameroon is among the riskiest countries in Africa to do business in 2023. Cameroon reported a risk score of 6.53 as of September 2023, down from 6.54 in September 2022.

13. South Africa

Reward Score 2023: 4.49

Risk Score 2023: 5.06

South Africa is among the riskiest countries in Africa to do business in 2023. South Africa reported a risk score of 5.06 as of September 2023, up by 0.37 from September 2022. Prominent sectors in South Africa include banking and finance, ICT, and transport.

12. Algeria

Reward Score 2023: 4.7

Risk Score 2023: 5.85

Algeria is among the riskiest countries to do business in Africa with a risk score of 5.85 in September 2023, up by 0.17 from September 2022. Some of the most prominent sectors in the country include agriculture, healthcare, and ICT.

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11. Rwanda

Reward Score 2023: 4.9

Risk Score 2023: 5.46

According to our methodology, Rwanda is one of the riskiest countries in Africa to do business in 2023, with a risk score of 5.46 as of September 2023, up by 0.25 from September 2022. The IT sector, agro-processing sector, tourism sector, and energy sector bring the most business to the country.

10. Morocco

Reward Score 2023: 4.49

Risk Score 2023: 4.13

According to our methodology, Morocco is one of the riskiest countries in Africa to do business in 2023. The country reported a risk score index of 4.13 as of September 2023, down from 4.29 from September 2022. Transport, ICT, agriculture, and renewable energy are some of the most profitable sectors in Morocco.

9. Democratic Republic of the Congo

Reward Score 2023: 5.15

Risk Score 2023: 7.53

According to our methodology, the Democratic Republic of the Congo is among the riskiest countries in Africa to do business in 2023 with a risk score of 7.53 in September 2023, up by 0.09 from September 2022.

8. Tanzania

Reward Score 2023: 5.19

Risk Score 2023: 5.35

According to our methodology, Tanzania is among the riskiest countries in Africa to do business in 2023. The country reported a risk score of 5.35 as of September 2023, down from 5.43 in September 2022. Some of the most profitable industries in Tanzania include Crop cultivation, livestock production, and agro-processing.

7. Kenya

Reward Score 2023: 5.22

Risk Score 2023: 5.8

Kenya is among the riskiest countries in Africa to do business in 2023. The country reported a risk score of 5.8 as of September 2023, down from 5.89 in September 2022. However, Kenya on the other hand is an attractive business location to venture capitalists for its growth potential.

6. Egypt

Reward Score 2023: 5.38

Risk Score 2023: 6.3

Egypt is a popular tourist destination in Africa and is also among the riskiest countries in Africa to do business in 2023. Egypt reported a risk score of 6.3 as of September 2023, up by 0.33 from September 2022.

The risk factor aside, the African region is home to some of the most rare earth metals and some of the biggest mining companies in the world, which include Gold Fields Limited (NYSE:GFI), Sibanye Stillwater Limited (NYSE:SBSW), and Harmony Gold Mining Company Limited (NYSE:HMY).

Click to continue reading and see the Top 5 Riskiest African Countries To Do Business in 2023.

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Disclosure: none. Top 15 Riskiest African Countries To Do Business in 2023 is originally published on Insider Monkey.

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