Political Risk in the Agricultural Industry in the SADC region: the Cases of Mozambique and Zambia

[摘要] ENGLISH ABSTRACT: Amidst the decline in investment returns of traditional sectors such as the oil and gas industry, investment in the agricultural sector is increasingly proving to be a viable alternative. In the Ernst & Young Africa 2015 Business Attractiveness Survey, respondents indicated that agriculture presented the most assuring growth opportunity in Africa. Being largely under-utilized, the African agricultural sector contains vast potential for further economic and commercial expansion. However the same survey revealed that these investors have perceptions of instability and uncertainty regarding doing business in Africa.Subsequently, the objective of the research was to compile a list of essential political risk factors for the agricultural sector in the SADC region. With the rise in globalization and increased political and economic integration, the nation-state has taken a back seat to regional economic blocks. As such, it becomes increasingly important to approach political risk analysis with the regional unit in mind. Considering the contagion or spill-over effects from one country to another in an increasingly interconnected world, the value of country specific risk analysis is declining.Through historical political analysis and country reports of Mozambique and Zambia as case studies, the research objective was achieved. To determine the salience and vividness of political risk factors for this industry in the region, a contextual analysis of each factor was conducted. The purpose of this analysis was not to produce a risk rating of the likelihood of each risk factor materializing, but to ascertain whether it is a political risk factor worth considering.In answering the main research question, the research not only addressed the dearth of micro-political risk analysis (as most risk analysis is concentrated on the global oil and gas industry with little attention paid to other strategic industries), it also highlighted the disparity between the conceptualisation of political risk from an agricultural-business viewpoint and in international business.Stellenbosch University https://scholar.sun.ac.zaivAs investment in the agricultural industry often involves the acquisition of large tracts of land, it is a highly contentious issue in the African context which carries significant socio-cultural and political sensitivity. The study found investment in agriculture to be highly susceptible to political risk. Four salient political risk factors for the SADC region‟s agricultural industry were identified and includes security of land tenure, corruption, civil unrest and political instability.This list of essential regional political risk factors for the SADC region‟s agricultural industry, can serve as a decision-making tool for investors wanting to participate in this area. The outcome of this study can therefore be used as a tool to help decision-makers understand their risk exposure and to provide the basis for the development of appropriate risk management solutions in this regard.

[发布机构] Stellenbosch University