Ecobank Group CEO Albert Essien urged investors to be prepared to engage with African countries on a long-term basis and avoid abrupt changes in investment focus because of perceived instability in certain markets.

Speaking in Munich at the 4th Conference on Managing Risk in Africa, Essien encouraged managing risks associated with doing business in Africa, including fiscal and monetary policy issues such as foreign exchange restrictions, transparency and compliance, political instability and corruption and resource and infrastructure challenges.

Against the backdrop of what he outlined as a generally positive outlook for Africa, he advised investors against viewing Africa as one, but rather 54 countries with different growth prospects, different infrastructure, trade agreements, tax regulations, culture and levels of technological development.

The Ecobank Group CEO offered executives overseeing market entry strategy in Africa six key considerations that they would have to contend with.

These, he said, were: understanding the local business culture; assessing which markets represent the best balance of risk and reward; finding and vetting appropriate local partners; understanding local market regulations; local environmental factors; and levels of technological development.

Essien highlighted several market entry risks, which he enumerated as: political risk, reputational risk, operational risk and physical risk to staff and assets.

He encouraged scenario planning as a good way to anticipate what future trends might emerge and what their impact and probability might be.

“Whatever risks are identified, they are best viewed holistically rather than in isolation. New market entrants will need to develop a clear risk appetite and weigh the opportunity against the cost of risk mitigation, which can be expensive,” he said.

The Ecobank boss advised setting up a risk review board with participation from senior management, and said this would help ensure the right level and scope of ongoing risk monitoring.