Africa, a continent comprising 54 nations, offers both challenges and opportunities for businesses expanding into new markets. During a recent panel on Africa’s investment landscape, StoneTurn Partner Sarah Keeling shared strategies for mitigating risk. The discussion, moderated by acclaimed journalist Rageh Omaar, featured industry experts including Andrew Sekandi, Founder of Alpha Sierra; Temi Marcella, Partner at Alcent Capital; and Ogbemi Ofuya, Partner at Helios Investment Partners. Together, they provided valuable insights on how businesses can successfully navigate the complexities of the African market and gain a competitive edge.
The Need for Robust Risk Mitigation
Throughout the discussion, Sarah Keeling explained how the growing activity in mergers and acquisitions (M&A) and investment transactions across Africa highlights the pressing need for comprehensive pre- and post-investment risk strategies. As competition intensifies in sectors such as energy, extraction, and technology, the associated risks, including corruption and enforcement actions, become increasingly important to address. Watch the clip below to learn more.
Key Risk Mitigation Strategies
1. Due Diligence on the Ground
Thorough due diligence is a critical risk mitigation strategy, particularly in the local context. It’s essential to understand who your partners are, their relationships with government entities, and how these connections may impact your business. The risk of enforcement activities, including scrutiny from organizations like the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), should be carefully managed.
2. Cultural Understanding
A deep understanding of the cultural and business context in which deals are made is vital. This cultural insight can significantly impact the success of a partnership or venture, providing valuable guidance in new markets.
3. Local Trusted Partners
Building relationships with local partners you can trust and who are well-established in the market is essential. These partnerships not only help mitigate risks but also provide a more stable foundation for growth and business expansion.
Risk Mitigation as a Competitive Advantage
Risk mitigation in Africa is not just a defensive measure; it’s an opportunity to gain a competitive edge. By gaining a thorough understanding of the risks associated with doing business in new markets, companies can better position themselves for success, making informed decisions that lead to sustainable growth.
If you have any questions or would like to discuss these topics please reach out to Sarah Keeling.
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