Political, Legal and Economic Flashcards
Invest in Africa, Teixeira Duarte case study
what is political risk
-risk of political decisions
- can affect negatively the profitability or sustainability of an investement
ex: War in Ukraine shows how political risks rise out of nowhere
4 types of political risks
systematic
-procedural
-distributive
-catastrophic
what is systematic risk
impacts all firms that operate in the same political system
- example: global financial crisis 2007-2008
what is procedural risk
- risk from daily movement of people, products and funds
- example: tarder at an investement
what is distributive risk
-result of profit sharing
what is catastrophic risk
- arises from specific dramatic events that leads to civil disorder
what are the 5 legal systems in the world
-common law (traditions)
-civil law (code of conducts)
-muslim law
-customary law
-mixed system
2 types of legal issues
-strategic issues (property rights)
- operational concerns (labor)
4 economic factors that affect ib
- curreny
-inflation
-purchsing power
-exchange rates
4 types of economic systems
- market economy (priavte opwns, capitalism)
-mixed economy (socialism, goc and private)
-command economy (gov owns, communism)
-traditional systems
5 reasons europe should invest in Africa
- rapidly growing market
-natural resources (oil,gas,minerals)
-infrasctrure investment
-political stability (free trade-AFCFTA)
-innovative technology
Benefits in Angola
-second oil producer
-4th largest producer of diamons
-after civil war a hugh econoic growth
-political stability since 2002
-reduce subsidiaries
drawbacks in investing in angola
-inflation rate
-high government debt
-social inequalities
-currency devaluation (strict monetary policy)
culture in angola
- hierarchy culture
-slow decision making - very formal business meetings
-tribal routes
main sectors to invest in Angola
-agriculture
- consumer goods
-oil and gas
-mining and metals
