ENGLISH ABSTRACT: Political risk analysis is considered one of the essential ingredients in decision making
processes when investing abroad. The Iranian Revolution and the oil crisis in the 1970s
accentuated this need as investors increasingly felt the need for a proper assessment of the
risks involved in establishing a business in other countries.
Negative images of African countries combined with conventional risk models which are not
able to accurately assess the political risk realities of post-conflict African countries, may be
one of the reasons for why African countries struggle to attract a substantial amount of FDI.
This study suggests that alternative risk models which are more African-orientated may aid in
improving this situation.
This study has analysed the political risk of Sierra Leone using a conventional risk model, and
an African-orientated political risk model. The aim of this study was to assess whether
conventional political risk models need to be adjusted to be able to more accurately assess the
political risk of post-conflict African countries. The main research question guiding this study
was:
Are conventional risk models able to objectively rate the political risk of post-conflict
countries in Africa?
The conclusion of this research was that African-orientated political risk models are able to
more accurately assess the political risk of a post-conflict African country such as Sierra
Leone. This is mainly due to the soft variables used in a political risk model and also the
relationship between the variables included in the models. The African-orientated political
risk model needs to be analysed further, but this research has made clear the need for a reevaluation
of existing political risk models to be better equipped when analysing post-conflict
African countries. This will not only benefit African post-conflict countries in improving their
risk ratings, but also provide foreign investors with a more accurate identification of the
potential political risks facing an investment in post-conflict African countries. It was
acknowledged in this study that the political risk analyses of Sierra Leone were not conducted
by someone who has inside information of the political risk models used which is a limitation
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for the results of this study. It is, however, possible to detect potential weaknesses with each
political risk model and possible areas of improvements.
AFRIKAANSE OPSOMMING: Politieke Risiko Analise word as een van die belangrikste bestandele in die besluitnemingsproses
geag wanneer daar oorsee belê word. Die Iranese Rewolusie en die Olie krisis in die
1970’s het hierdie nood beklemtoon, aangesien beleggers toenemend die belang van deurdagte
assesering van die risikos in verband met die oprigting en instandhouding van besighede
in ander lande erken het.
Negatiewe opvattings van Afrika lande, tesame met konventionele risiko modelle wat nie
geskik is on akkurate asseserings van politike risiko realiteite op te lewer, is dalk van die
redes waarom Afrika lande sukkel om groot Direkte Buitelandse Beleggings te lok. Hierdie
studie stel voor dat alternatiewe risiko modelle wat meer Afrika-gesind van aard is die situasie
kan help oorbrug.
Hierdie studie het die politieke risiko situasie van die Sierra Leone analiseer aangaande‘n
konvensionele riskio model en met behulp van’n Afrika-georienteerde politieke risiko model.
Die studie het gepoog om te assesseer of die konvensionele modelle van politieke risiko
gewysig moet word om in staat te wees om meer akkuraat te oordeel in verband met politieke
risiko in post-konflik Afrika lande. Die hoof navorsingsvraag wat die studie gedryf het is die
volgende: Is die konvensionele risiko modelle in staat om objektief te werk te gaan om die
politieke risiko van post-konflik lande in Afrika te meet?
Die gevolgtrekking van hierdie navorsing is dat die Afrika-georienteerde politieke risiko
modelle meer gepas is om die politike risiko van post-konflik lande soos Sierra Leone te
meet. Dit is hoofsaaklik die geval weens die sagte veranderlikes wat gebruik word in’n
politieke risiko model asook die verband tussen die veranderlikes wat in die model ingesluit
word. Die Afrika-georienteerde politieke risiko model moet verder uitgebrei word, alhoewel
hierdie navorsing dit duidelik maak dat die belang bestaan vir‘n herevaluering van die
bestaande politieke risiko modelle om beter toegerus te wees om analise van post-konflik
Afrika lande uit te voer. Dit word erken dat hierdie studie van die politieke risiko van Sierra
Leone nie uitgevoer was deur iemand wat‘n intieme kennis van politieke risiko modelle het
nie. Dit is uiteindelik wel moontlik on potensiele swak plekke in die mondering van elke
politieke risiko model uit te sonder, en moontlike areas van verbetering voor te stel.
