It is easy to generalise about Africa. The continent is gigantic, its population booming but it is a very diverse and complex entity that one struggles to find any useful generalisations. Within that complexity anyone can find good or bad things to say. It is both a place of extreme risk and extreme opportunity. But there are also growing areas of sustainable and valuable opportunities that businesses need to understand.

Inoxico has been helping its clients to assess companies in Africa for over 10 years and has developed a strong appreciation for this complexity and opportunity. We try to avoid the extreme optimism and extreme negativity and focus on the facts that come from the data.

Inoxico specifically helps its clients to assess the risks in doing business with a company in Africa. We assess the credit risk in trade credit transactions, we assess the procurement risk when buying from African companies and we combine this with a suite of 3rd party compliance and other risk assessments (e.g. KYC and Ultimate Beneficial Ownership checks).

In this post we want to briefly consider how three factors assess how we view companies in Africa.


There are certain industries in certain countries in Africa that experiencing very high rates of growth at the moment. These hotspots are the kind where businesses are assisted buy a rising tide of growing access to market opportunities, growing access to finance and growing access to talent. All these contribute to a businesses capability to sustain growth and overcome short term risks. Such hotspots at the moment are northern Mozambique with the initiation of a large gas extraction project.

Alternatively businesses that are operating in depressed environments where the market is contracting, finance is scarce and talent is leaving, the result is that once-strong businesses struggle to overcome any risk to their business.

Currency Risks

No discussion regarding payment can avoid the risk of currency issues. The ability for local companies to access foreign currency is a perrenial problem and must be well understood when deciding on credit terms. Political exposure in this case can assist in getting access to forex but when governments change, once strong relationships can suddenly disappear and remove the ability for a local company to repay. In this single example, understanding how your local customers are able to access forex is a key data point in your decision making process.

Political Risks

This is a subject discussed at length on a macro level but the effect is not always well understood at the level of a trade credit transaction. Again, political connections within your customer can both assist and harm their ability to trade and understanding how political changes are likely to affect your client’s businesses is a key data point in managing your risk exposure with them.

If you are interested in finding out more about how we can assist your business to grow with strong cashflows, please get in touch.