London and Hong Kong-based risk management consultancy A2 Global Risk published a new report assessing the investment risks associated with port infrastructure expansion in Sub-Saharan Africa, against the backdrop of global geopolitical competition. The COVID-19 pandemic and associated restrictions on travel and operations caused unprecedented disruption to international trade and highlighted the risks linked with ageing port infrastructure and regional bottlenecks.
Cognisant of such risks, African governments are actively seeking to expand their infrastructure and trade provisions to reduce non-tariff barriers, as part of their efforts to modernise their trade infrastructure, such as airports, seaports, roads, and internet access. International actors active in this space are ramping up their competition for market access amid mounting trade and geopolitical tensions globally.
In Africa, traditional global powers such as France and the European Union on one hand, and China on the other, have for years competed over lucrative port expansion and management contracts. But both Western and Chinese companies have been accused of abuses and neo-colonialism. A growing number of Middle Eastern countries, led by the United Arab Emirates as well as Turkey, is now providing a third alternative.
While this growing competition offers African countries new alternatives to choose from, which may in turn foster local agency, it also raises questions about responsible
corporate actors and signals emerging political risks to companies with an established presence.
“Gulf countries, particularly Saudi Arabia and the UAE, have markedly increased their presence on the continent, particularly in the Horn of Africa, over the past decade,” says Senior Analyst for Sub-Saharan Africa Olivier Milland. “To a large extent this forms part of their strategic development plans to diversify economies and secure future food supplies. Meanwhile, efforts at home to attract foreign capital or entice companies to establish offices in the region means that corporate standards there need to be elevated to the same level as those in advanced economies, placing a greater compliance burden on Gulf-based companies if they are to maintain a competitive advantage.”
About A2 Global RIsk
A2 Global Risk is a political and security risk management consultancy headquartered in Hong Kong with offices throughout Asia-Pacific as well as London and Washington DC.We provide subscription-based Information Services platform and bespoke security riskmanagement services across the globe to help companies understand their political environments and mitigate risk accordingly. For more information visit
www.a2globalrisk.com
