Reputational Crisis Affecting Africa’s Investment Climate – Expert

The negative impression about Africa across the world is negatively affecting the flow of foreign direct investments into the continent.

International Financial and Risk Management expert, Komi S. Klu said this on Wednesday in Accra in a presentation on the first day of the Chartered Institute of Marketing Ghana (CIMG’s) two-day annual strategic marketing conference – 2016.

The marketing conference is an annual programme organized by CIMG after the yearly marketing awards.

Speaking on the topic: ‘Managing Political Risk in Sub-Saharan Africa (SSA), Mr. Klu, who previously worked with Capital One Finance and HSBC, said countries in the sub-region are perceived as risky because of some historical factors.

“All of Africa, we suffer from reputational deficit. When you talk of Africa, people think something negative about it,” he said.

He defined political risk as any losses that are caused by government’s action or inaction.

Most countries in the sub-region, including Ghana, he said, still remain highly corrupt, while others continue to experience violent conflicts.

“Most investors are afraid to use their credit cards in Africa due to the perception of fraud,” the Financial Services Executive, who has over 15 years of experience, disclosed.

The perception, according to him, makes it difficult for foreign investors to do business on the continent.

In order to overcome this negative image, he said both governments in the sub-region and economic actors have to take steps.

Governments’ responsibilities in ensuring a stable investment climate, he said, include building strong institutions, not strong men; fighting corruption, especially in the corridors of power, as well as dismantling what he termed as crony capitalism.

He also stressed the need for the promotion of the rule of law “and a strong, trustworthy judiciary.”

Touching on the role of corporate organizations in helping to change the negative perception, he said businesses must “trust and deal with the country’s institutions not just political authorities.

He warned business leaders to detach their personal political affiliations from their corporate operations.

President of the Chartered Institute of Marketing Ghana (CIMG), Kojo Mattah, explained that the choice of the theme for this year was premised on the fact that “Ghana must exist for us to have peace of mind to practice our profession and also for us to push forward the agenda of developing a lasting democracy.”

By Melvin Tarlue