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Foreign Direct Investment In Africa


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Foreign Direct Investment In Africa

  1. 1. Deloitte footprint into Africa Growth of sub-Saharan Africa is projected at 5.3% in 2012. It is anticipated to pick up to 5.6% in 20131. Deloitte footprint in Africa NIGER CAMEROON GABON DEMOCRATIC REPUBLIC OF CONGO KENYA UGANDA SEYCHELLES RWANDA CABINDA TANZANIA BOTSWANA BOTSWANA GUINEA-BISSAU GUINEA MAURITIUS SIERRA LEONE REUNION IVORY COAST GHANA LESOTHO SOUTH AFRICA GABON COUNTRIES NOT SERVICED ETHIOPIA SOUTH SUDAN DEMOCRATIC REPUBLIC OF CONGO SOMALIA KENYA UGANDA RWANDA BURUNDI LESOTHO SOUTH AFRICA CENTRAL AFRICAN REPUBLIC CAMEROON EQUATORIAL GUINEA DELOITTE OFFICES COUNTRIES SERVICED • Foreign Direct Investment in Africa of US$42.7 billion in 2011 could more than double by 2014. • Trade with other emerging markets has significantly increased: • India’s trade with Africa has doubled in the past four years, from US$24.98 billion in 2006–07 to US$52.81 billion in 2010–11. • Brazil has intensified its efforts to forge closer relationships with Africa with its investments banks raising US$1 billion to create the world’s biggest investment fund for Africa, focusing on areas such as infrastructure, energy and agriculture. • The volume of Chinese concessional loans to Africa is estimated to have grown from a cumulative total of US$800 million in 2005 to a commitment of US$10 billion between 2009 and 2012. DJIBOUTI NIGERIA LIBERIA SWAZILAND 0-1 1. World Bank MO SWAZILAND 10 - 20 1 - 10 ZIMBABWE NAMIBIA ERITREA CHAD BURKINA FASO CABINDA TANZANIA Projected Real GDP Growth for 2012 (%) ANGOLA 7 and above ZAMBIA UE IQ 5-7 ZIMBABWE NAMIBIA 3-5 BOTSWANA SWAZILAND 1-3 Negative - 1 No data available LESOTHO SOUTH AFRICA MB ZA MO R 20 - 50 MB ZA MO NIGER SUDAN GAMBIA MAD AGAS CA ZIMBABWE NAMIBIA I MB ZA MALI SENEGAL MALAWI 50 - 200 EGYPT C BRA ONG ZAV O ILLE IQ UE MAURITANIA E QU MAD AG ZAMBIA ZAMBIA CAR ANGOLA COMORES MALAWI TANZANIA ANGOLA Partner Email: Direct: +968 2481 7775 LIBYA SA RWANDA BURUNDI Projected Protection for 2012 (millions) ALGERIA RA KENYA UGANDA HA DEMOCRATIC REPUBLIC OF CONGO CABINDA Rob O’Hanlon MOROCCO BURUNDI MAD AGAS Partner Email: Direct: +33 (1) 55 61 27 47 SOMALIA MALAWI Alain Penanguer North Africa ETHIOPIA SOUTH SUDAN RN EQUATORIAL GUINEA GABON Francophone Countries CENTRAL AFRICAN REPUBLIC TE LIBERIA GHANA NIGERIA SOUTH SUDAN ES IVORY COAST CAMEROON EQUATORIAL GUINEA DJIBOUTI ETHIOPIA W GUINEA SIERRA LEONE SOMALIA CENTRAL AFRICAN REPUBLIC R GUINEA-BISSAU ERITREA CHAD BURKINA FASO DJIBOUTI NIGERIA ASCA SENEGAL GHANA LIBERIA SUDAN GAMBIA C BRA ONG ZAV O ILLE CEO Deloitte East Africa Email: Direct: +254 2042 30000 CAPE VERDE ISLANDS SIERRA LEONE MALI TOGO BENIN CEO Deloitte West Africa Email: Direct: +234 (1) 2717810 MAURITANIA IVORY COAST C BRA ONG ZAV O ILLE RN BURKINA FASO TE ES Sammy Onyango ERITREA CHAD GUINEA W Adeniyi A Obe EGYPT NIGER SENEGAL GUINEA-BISSAU SA HA EGYPT LIBYA SUDAN GAMBIA LIBYA MALI TOGO BENIN ALGERIA RA East Africa A MAURITANIA CAPE VERDE ISLANDS MOROCCO West Africa ALGERIA HA R CEO Deloitte Southern Africa E mail: Direct: +27 (0)11 209 8807 SA Head of Africa Desk E mail: Direct: +27 (0)11 806 6169 ER N Lwazi Bam MOROCCO W ES T Anushuya Gounden • Africa is the world’s second-largest and second most-populous continent after Asia. • Africa has nearly a billion people with over 1000 languages spoken over 54 countries. • Africa has the youngest population of any continent in the world, with 41% of the population under the age of 15. • The image below gives an indication of the 2012 projected population numbers per country: TUNISIA Southern Africa: TUNISIA Contacts TUNISIA Fast Facts TOGO BENIN Contacts • In 2012, 40 % of the continent’s one billion people live in cities - a proportion roughly comparable to China’s and larger than India’s. By 2030, this share is projected to rise to 50 %, and Africa’s top 18 cities will have a combined annual spending power of $1.3 trillion. • Africa’s long-term growth will increasingly reflect interrelated social and demographic changes creating new domestic engines of growth. Key among these will be urbanization, an expanding labor force, and the rise of the African middle-class consumer. • In 2012 oil exporting African countries benefited the most from higher prices, with improved terms of trade contributing to an equivalent of 8.5 percent to GDP. • It takes 18 days average time to clear customs on direct exports in Democratic Republic of Congo and 2.6 days in Niger; conversely for imports it takes 45.4 days in Democratic Republic of Congo and 3.7 days in Botswana. • Road density is lower in Africa than other developing regions: 152km of roads per 1 000 square km of land area, and only one third of it is paved. • Deep-sea ports are currently connected to remote internal regions by 10 000 km of road, but between 60 000 and 100 000 km of road are required to achieve an intra-regional trunk network. • The African countries with the highest projected GDP growth rates for 2012 include Libya, Sierra Leone, Niger, Angola, Ghana, Liberia and Cote d’Ivoire. The diagram below indicates the 2012 projected growth rates for all African countries: Amongst fast-growing economies in 2011 were resource-rich countries such as Ghana, Mozambique, and Nigeria, as well as non-resource-rich economies, Rwanda and Ethiopia, all exceeding growth rates of at least 7% in 2011. The Deloitte Africa Desk Although the statistics from various sources differ slightly according to variables, there is a clear message that the projected growth rate for Africa is higher than that of developed regions and on a par with, or even higher than many developing nations. Hence, business leaders globally accept that investment in Africa has become a key driver for increasing shareholder value. As explained overleaf, the Africa Risk Map is a proven tool to help executives identify and mitigate the risks and challenges that go hand in hand with investment on the continent. For practical application, there is no “one size fits all approach”, so the Deloitte Africa Desk provides a focal point for facilitating an informed and pragmatic solution that meets clients’ unique strategies for success. The Desk mobilises the appropriate service line expertise, business intelligence, industry experts and experienced country partners with the local knowledge and cultural understanding that is so critical to success. Into Africa. A number of our clients acknowledge that the support provided by the Deloitte Africa Desk, coupled with the fact that we stay close to them throughout the investment and implementation phases, have played a key role in enabling them to grow their business in Africa. Source : IMF Data Mapper Unmasking potential
  2. 2. Africa Risk Map Strategy Strategy & Planning & Planning The Africa Risk Map Experience has shown that risk and reward are inter-related and businesses cannot maximise reward (Shareholder Value) without taking a calculated risk. The art and science of calculating risk is the challenge faced by executives on a daily basis. An in-depth, informed risk analysis is critical to achieve shareholder value. The African continent is perceived to be world’s greatest opportunity for corporate expansion. However, lack of proper risk analysis has meant many organisations have been unable to maximise shareholder value and have either under-achieved or failed in their African expansion endeavours. The Africa Risk Map provides a unique view on the pervasive and interconnected nature of risk, giving executives a useful tool to identify the specific risks pertaining to their organisation when operating in Africa. At Deloitte, we help you focus on the areas that matter most, identifying the most practical ways of getting things done and ensuring that initiatives deliver on their intended business value. The Africa Risk Map makes this process simpler by accelerating the identification of key risk areas and mitigation techniques, in order to contribute to greater shareholder value. Overall, the Africa Risk Map helps you focus on the right things and serves as a graphic reminder of what you are doing and why. Don’t risk growing your business in Africa without customising the Map, based on risks that impact your specific organisation. Areas could include regulatory, geographic industry and company-specific issues. For information on customising the Africa Risk Map to meet the needs of your organisation, please contact Deloitte. Governance Governance Operations/Infrastructure Operations/Infrastructure Reporting Reporting External Factors External Factors Geopolitical Geopolitical Credit Rating Planning Credit Rating Planning Scenario PlanningScenario Planning Strategy Business Model Business Model Corporate Responsibility Corporate Responsibility & Sustainability & Sustainability Strategy Alliances Alliances Project Financing Project Financing Community Investment Ethics Community Investment Ethics Corporate Governance Corporate Governance Ethical Culture/Tone Ethical Culture/Tone at the top at the top Reputation/ Stakeholder Relations Reputation/ Stakeholder Relations Compliance Culture Culture Regulatory Reporting Political instability (local, Political instability (local, Failure Inability to contextualise Inability to contextualise Failure to “localise” Failure to “localise” Lack of support for community Lack of support for community Inability to access capital Inability to access capital Failure to consider scenario to consider scenarioInadequate Financing projects in Financing projects in Failure to foster an Failure to foster an Inadequate Inappropriate partners Inappropriate partners state, country) state, country) planning in long-termplanning in long-term planning planning stakeholder relations stakeholder relations in a corporate culture in a development initiatives development initiatives countries with humancountries with human rights rights corporate culture ethical culture ethical culture environmental scan environmental scan Inappropriate reliance on credit Inappropriate reliance on process credit process local context local context Inadequate structured Inadequate structured violations and economic violations and economic Cultural disconnect Cultural disconnect Poor community welfare initiatives Poor community welfare initiatives ratings for business decisions business decisions ratings for Failure to create a sound Failure to create a sound Inappropriate Inappropriate Inappropriate product/ Inappropriate product/ contractual arrangements contractual arrangements sanctions sanctions Failure to consider key Failure to consider key Inability to understand and to understand and culture where compliance- where complianceInability culture Corruption risks (including Corruption risks (including performance incentives performance incentives pricing mix pricing mix Ineffective decisions Ineffective decisions and programs and programs Inappropriate management of Inappropriate management of variables in scenario variables in scenario analysis analysis meet shareholder meet shareholder Financing projects with Financing projects with related matters and issues matters and issues related foreign corrupt practice foreign corrupt practice to send to to send functions overseas tofunctions overseasFailure to monitor and credit ratings credit ratings Failure to monitor and expectations Inconsistent with local Inconsistent with local expectations harmful environmental harmful environmental are treated with rigor are treated with rigor and and violations) violations) Inadequate responses to Inadequate responses to culture/norms cheaper markets cheaper markets impacts control unauthorised control unauthorised impacts culture/norms objectivity objectivity Lack of data integrity Lack of data integrity in financial in financial scenarios scenarios Failure to understandFailure to understand Excessive trade embargoes Excessive trade embargoes activities activities Ineffective reporting of community Ineffective reporting of community systems systems Failure to screen general Failure to screen general trends related to the trends related to the Failure to provide personnel to provide personnel Failure Management relying Management relying on on investment initiatives investment initiatives Expropriation by Expropriation by Failure to protect Failure to protect financing projects financing projects organisation’s workforce, organisation’s workforce, with the tools and resources tools and resources with the Inappropriate data management data management Inappropriate potentially inaccuratepotentially inaccurate data to data to governments governments whistleblowers whistleblowers creditors, customers,creditors, customers, and needed to attain ongoing and Failure to maintain services along needed to attain ongoing Failure to maintain services along of debt payments and maturity of debt payments and maturity facilitate scenario planning scenario planning facilitate Outsourcing Customers Outsourcing Customers other stakeholders other stakeholders rural and compliance compliance rural and underserved routes underserved routes schedules Suspension of country Suspension of country schedules concessions concessions Real or perceived influence perceived influence Real or Misaligned compliance Misaligned compliance of majority shareholders of majority shareholders culture to corporate Strategyto corporate Strategy Communications Communications culture Lack of cross-border Lack of cross-border Inappropriate Inappropriate Energy Management Energy Management Failure of outsourcing Failure of outsourcing agreements agreements Failure to adequatelyFailure to adequately & segmentation segmentation Natural Resource Natural Resource & Failure to enforce Failure to enforce Capital Planning Capital Planning & Alternative & Alternative agency to meet requirementsto meet requirements agency consider and/or respond to and/or respond tocompliance programs and consider compliance programs and Utilisation Utilisation Lack of free market Lack of free market Ineffective marketing Ineffective marketing Sourcing Sourcing shareholder proposals or shareholder proposals or apply disciplinary measures apply disciplinary measures Failure to establish Failure to establish Failure to perform legal Failure to perform legal mechanisms mechanisms message message stakeholders stakeholders ongoing ethics and ongoing ethics and Inability to access capital Inability to access capital review of outsourcingreview of outsourcing Inadequate Inadequate energy conservation energy conservation Inadequate ongoing Inadequate ongoing Commodity risk and natural Lack of adequate Lack of adequate Commodity risk and natural compliance compliance Inability to attract and Inability to attract and contract contract Poor corporate brandPoor corporate brand compliance communications compliance communications resource security infrastructure infrastructure Inadequate capital structure Inadequate capital structure communications (internal communications (internal Inability to utilise alternate sources Inability to utilise alternate sources retain customers retain customers resource security perception perception Sole source dependence on Sole source dependence on and debt/equity funding debt/equity funding and and external) and external) of energy of Failure to identify and train to identify and train Failure Inability Inability to mitigate natural to mitigate natural energy outsourced core functions outsourced core functions Unexpected adverse Unexpected adverse specific businesses affected businesses affected specific resource dependency Noncompliance with applicable resource dependency Capital allocation riskCapital allocation risk Failure to provide a Failure to provide a Noncompliance with applicable changes in customer changes in customer by new laws, regulations, by new laws, regulations, Loss of core competencies core competencies Loss of Transparency & Transparency & means means for employees to on energy demand/preferences demand/preferences Inability to comply with laws and regulations laws and regulations on energy for employees to Inability to comply with Investment risk Investment risk Customer & Customer & and policies and policies raise ethics and raise ethics and Financial Integrity Financial Integrity utilisation/conservation utilisation/conservation Failure to protect data Failure to protect data local regulations local regulations Inadequate monitoring of Inadequate monitoring of Laws & Regulations Economic Conditions/Laws & Regulations Economic Conditions/ compliance issues compliance issues Poor internal organisation internal organisation and Poor and entering and leaving entering and leaving the the Board Effectiveness/ Board Effectiveness/ customer usage customer usage Inadequate systems and Inadequate systems and Industry Trends Industry Trends process chain process chain organisation through organisation through Failure to provide an Failure to provide an Cursory reviews of financial reviews of financial Knowledge Knowledge Cursory processes for utilisation processes for utilisation outsourced functions outsourced functions anonymous reportinganonymous reporting line line Failure to align the business to align the business Failure Management Management statements and related statements and related and and reporting of natural reporting of natural Laws inhibiting foreign Macroeconomic changes Macroeconomic changesLaws inhibiting foreign strategy with capital planning with capital planning strategy Unintended data Unintended data disclosures disclosures resources resources ownership ownership Failure to engage Failure to engage Failure to understandFailure to understand and and Demographic changes Demographic changes mismanagement andmismanagement and or or employees and keep employees and keep Failure to challenge Failure to challenge exercise fiduciary duties exercise fiduciary duties Non-compliance withNon-compliance with country country leakage resulting in loss of resulting in loss of leakage ethics and compliance ethics and compliancemanagement assumptions Monetary & fiscal policy Monetary & fiscal policy management assumptions and jurisdiction-specific laws and jurisdiction-specific laws goodwill goodwill Ineffective/insufficient Ineffective/insufficient top of mind top of mind Water Reduction & Water Reduction & and regulations Hyper-inflation/deflation Hyper-inflation/deflation and regulations Sustainable Water Sustainable Water Inadequate oversightInadequate oversight of of independent committees independent committees Lack of or inconsistent Lack of or inconsistent Closed Loop Closed Loop Operational Planning Operational Planning Quality Quality internal and external internal and external auditors auditors Adverse legal/regulatory Adverse legal/regulatory connectivity connectivity Business cyclicality Business cyclicality Production Production Disconnect between Disconnect between local & local & Addressing Addressing changes (multi-jurisdictional) (multi-jurisdictional) changes Inadequate or unqualified Inadequate or unqualified home board home board Changes to industry Changes to industry Allegations Allegations Inappropriate deployment of Inappropriate deployment of Discharges and runoff finance organisation finance organisation Failure to reduce waste Discharges and runoff Failure to reduce waste Inappropriate lobbying Inappropriate lobbying structure structure Inadequate knowledge of Inadequate knowledge of resources resources affecting affecting availability of water availability of water Lack of financial expertise of financial expertise on Lack on Improper waste treatment/reuse/ Improper waste treatment/reuse/ board responsibilitiesboard responsibilities Lack of current economic of current economic Lack Policy Technology Policy Technology resources resources Lack of defined protocols of defined protocols Lack Inadequate departmental Inadequate departmental the audit committee the audit committee disposal practices disposal practices data data to address allegations address allegations to Inadequate understanding of Inadequate understanding of representation in plan representation in plan Excessive usage of water Excessive usage of water Inability to Inability to adopt a sustainable adopt a sustainable the organisation’s business the organisation’s business development development Failure to document Failure to document Failure to comply with manufacturing process Failure to comply with manufacturing process Policies conflict with Policies conflict with Inability to implementInability to implement inquiries and allegations, inquiries and allegations, Limited exposure to Limited exposure to Established plans are Established plans are applicable regulations on applicable regulations on business operations business operations Technology Technology including outcomes and/or including outcomes Compensation/ Compensation/ and/or Noncompliance with applicable Noncompliance with applicable management outsidemanagement outside of the of the unachievable unachievable Third Party/Joint Third Party/Joint water water actions taken actions taken waste management laws and waste management laws and CEO and CFO CEO and CFO Inadequate communication Inadequate communication to consider and Performance Performance Failure Failure to consider and Competition Competition Venture Venture Lack regulations Lack of available water of available water regulations of policies of policies protect all technical protect all technical Incentives/Alignment Incentives/Alignment Lack of a defined Lack of a defined Lack of board cohesiveness board cohesiveness Lack of Requirements Requirements environments environments procedure during crisis procedure during crisis Ineffective enforcement of Ineffective enforcement of Misalignment of performance Misalignment of performance Information Information Business Continuity Business Continuity Inadequate competitive Inadequate competitive policies policies Inadequate structures to Inadequate structures to Lack of or restricted Lack of or restricted Loss of sensitive Loss of sensitive metrics with long-term metrics with long-term analysis analysis management & management & Management (BCM) Management (BCM) facilitate identification of JV identification of JV facilitate access to technologyaccess to technology information through information through strategy strategy Sustainability Sustainability partners partners reporting reporting inappropriate handling inappropriate handling Climate Change Climate Change Prevention of anti- Prevention of antiStrategy Strategy Executive compensation Executive compensation competitive practicescompetitive practices Contract risk Contract risk Failure to establish effective to establish effective Failure Failure to identify and Failure to identify andinconsistent with stakeholder Inadequate business Inadequate business impact impact inconsistent with stakeholder rd rd executive dashboard executive dashboard views of views of assess ethics and assess ethics and Fragmented markets Fragmented markets analysis analysis Inability expectations expectations Inability to control and reduceto control and reduce Inability to audit 3 parties to audit 3 parties Inability Business Business Failure to demonstrate compliance issues compliance issues Mergers/AcquisitionsFailure to demonstrate Mergers/Acquisitions compliance-related risks compliance-related risks emissions corporate responsibility emissions corporate responsibility Concentration Inability to build alternate Inability to build alternate Concentration Undue Lack of project funding Lack of project funding and related actions and related actions Undue emphasis on short- emphasis on shortLack of data integrity Lack of data integrity of of infrastructure/capabilities to handle infrastructure/capabilities to handle Inappropriate monitoring of term results term results Inappropriate monitoring of CR&S priorities not CR&S priorities not information relied upon for information relied upon for emergencies emergencies greenhouse gas emissions greenhouse gas emissions adequately engrained Inability to identify a clear Inability to identify aadequately engrained clear Dependency on facilities Dependency on facilities Misalignment of incentives Misalignment of incentives ongoing compliance ongoing compliance within overall business end-state vision for the end-state vision for within overall business the not owned by the not owned by the Ineffective BCM communication, Ineffective BCM communication, Noncompliance with applicable and rewards Noncompliance with applicable Corrective Action & Corrective Action & and rewards management management strategy strategy integration integration organisation organisation training, and/or testing strategy training, and/or testing strategy laws and regulations laws and regulations on on Discipline Discipline Failure to identify and report to identify and report Failure Markets External Fraud External Fraud Markets greenhouse gas emissions/ greenhouse gas emissions/ Lack Lack of Insufficient accounting, tax, Insufficient accounting, tax, cooperation with of cooperation with Supplier over-dependency Supplier over-dependency key compliance-related compliance-related key pollution control industry-wide initiatives pollution control industry-wide initiatives regulatory, and operational regulatory, and operational trends trends Failure to discipline Failure to discipline Customer overCustomer overtarget screening target screening Board Structure &Board Structure & Failure to Failure to adopt and upgrade adopt and upgrade employees for non- employees for nondependency dependency Commodity price riskCommodity price risk Tender irregularities Tender irregularities Inadequate reporting Inadequate reporting of of pollution pollution control technologies control technologies Leadership Leadership compliance compliance Incomplete due-diligence Incomplete due-diligence material compliance issues tocompliance issues to material Foreign exchange rate risk exchange rate risk Foreign Vendor & business partner & business partner Vendor Inability Inability to generate tradable to generate tradable appropriate external appropriate external Inconsistent treatment of Inconsistent treatment of Failure to achieve synergies to achieve synergies Failure fraud fraud Inability to attract or identify stakeholders local carbon credits carbon credits Interest rate risk Interest rate risk stakeholders employees for non- employees for non- Inability to attract or identify local from post merger integration merger integration from post board members board members Customer fraud Customer fraud compliance compliance Ineffective carbon reduction Ineffective carbon reduction Financial market risk Financial market risk Board conflicts of interest orconflicts of interest or lack Board lack programs Risk Assessment Risk Assessment & & programs Ineffective anti-fraud Ineffective anti-fraud Failure to implement Failure to implement changes changes of independence of independence programs programs Controls Controls to correct systemic program systemic program to correct Innovation Data breach and external breach and external Data political fraud political fraud Hazards/ Hazards/ Catastrophic LossCatastrophic Loss Man-made hazards/terrorism hazards/terrorism Man-made Natural disasters Natural disasters Health epidemics (SARS, epidemics (SARS, Health influenza, etc.) influenza, etc.) Innovation Pricing Pricing Biodiversity Biodiversity Fair Trade Certification Fair Trade Certification issues issues Weak structure/composition of Weak structure/composition of the board the board Inability to identify significant to identify significant Inability compliance risks Ineffective communication Ineffective communication compliance risks between and amongst the board amongst the board to establish controls to establish controls to between and Failure Failure to and management and management mitigate identified risks mitigate identified risks Inappropriate pricing Inappropriate pricing of of Inability to sustain and/or Inability to sustain and/or Policies & Policies & Failure improve market share due market share products/services products/services Failure to minimise invasive to minimise invasive improve due Failure Failure to adopt fair-trade to adopt fair-trade Procedures Procedures transportation of species business practices business practices to new transportation of species to new to lack of innovation to lack of innovation Lack of appropriate tone set by Lack of appropriate tone setInability to communicate risksto communicate risks by Lack of flexibility in pricing of flexibility in ecosystems Lack pricing ecosystems Inability leadership leadership mechanism mechanism Failure to generate new Failure to generate new Inability to Inability to get products certifiedget products certified across lines of business across lines of business Inadequate ethics and Failure to Failure to establish protective establish protective the Fair Trade Certified Fair Trade CertifiedInadequate ethics and products or services products or services with the with compliance policies compliance policies Inappropriate decision-making Inappropriate decision-making Failure to comply with Failure to comply with areas for biodiversity areas for biodiversity conservation conservation Failure to establish monitoring establish monitoring Failure to mark mark and delegation of authorities and delegation of authorities preferred pricing preferred pricing Failure to embed Failure to embed and testing programsand testing programs Failure to continuously monitor continuously monitor Failure to Failure to improve natural resource generate businessto generate business Failure to improve natural resource innovation across theinnovation across the Inability Inability to policies & procedures policies & procedures Failure to comply with Failure to comply with management in the production management in the production Inability to sustain control Inability to sustain control organisation organisation and reputation through fair trade and reputation through fair trade pricing regulations pricing regulations landscape landscape improvements improvements Tax Reporting Legal Entity Planning Lack of integration of internal controls over financial reporting processes with other operational and/or compliance processes Inability to identify and remediate material weaknesses and significant deficiencies Material misstatements in the financial statements Inability to report on the effectiveness of internal controls Human Resources Finance Legal Compliance Noncompliance with local filing requirements Failure to maintain adequate documentation for claiming of tax audits across jurisdictions Inability to produce tax basis balance sheets Improper valuations Lack of integration of internal controls over financial reporting processes with other operational and/or compliance processes Inability to identify and remediate material weaknesses and significant deficiencies Inadequate global tax provision evaluation Litigation & Dispute Resolution Failure to assess local regulatory and compliance risks while forming a new entity Inadequate local legal counsel Complexities in revising contracts with customers/ vendors for merged entities Residual claims from disposed or acquired entities Inadequate assessment of the entity structure Lack of pre-emptive legal risk management process Lack of full understanding of local tax incentives Pass-through liability from business partners Ineffective litigation risk assessment Inability to defend lawsuits Taxation Accounting Inability to meet tax requirements Inappropriate accounting policies Inadequate tax risk management Lack of integrity of financial information Inadequate recorded or overly aggressive tax planning Insufficient anti-fraud programs and controls Noncompliance with transfer pricing requirements Inappropriate/inadequate manipulation of estimates and reserves Risk of cross-border liability Audit Quality Privacy & Security Laws Labour & Employment Issues Failure to assess the effectiveness of internal controls Capital Management Failure to evaluate optimal sources and cost of finance Ineffective audit planning Compliance with Accounting Standards & Policies Failure to establish formal privacy policies Management Reporting Inability to implement International Financial Reporting Standards(IFRS) and/or local reporting standards Ineffective presentation of information Inappropriate accounting policies Insufficient sharing of information Failure to implement privacy programs in accordance with local regulations Failure to comply with applicable privacy legislations Inability to report on key metrics Failure to incorporate local employment laws into Human Resources policies Failure to engage with local trade unions or other local bodies Lack of information on legal capital requirements Management override of controls Lack of understanding of local exchange controls Lack of independent auditors Inadequate capital structure and debt/equity Inability to access additional capital Lack of awareness of employment laws among personnel Failure to optimise capital structure Lack of knowledge of accounting policies Inability to monitor and implement standards Failure to establish a record keeping policy Failure to register IP rights locally Inappropriate information for investment decisions Inability to produce records Failure to protect sensitive information pertaining to IP Failure to align investments with business strategies Unavailability of financial information to make decisions Noncompliance with applicable laws and regulations Lack of data quality and integrity Sustainability Reporting Failure to disclose non-compliance with applicable environmental laws and regulations Failure to position sustainability as an investable concept Inability to address shareholder concerns Lack of adherence with record keeping laws and obligations Financial Disclosure Lack of knowledge to preserve legal evidence Incorrect disclosures or missed events due to lack of data integrity Inadequate management discussion and analysis of events that may require a disclosure Financial Statement Fraud Lack of effective internal controls Ineffective anti-fraud Programmes Failure to implement segregation of duties Intellectual Property Infringement of IP rights owned by others Failure to protect the use of IP Failure to support international patent rights Failure to disclose information required by accounting standards and local regulation Inadequate management discussion and analysis Corporate Assets Supply Chain Human Resource Policies & Procedures Human Resource Policies & Physical Security Procedures Physical Security Planning Government Investigations Corporate Investigations Lack of guidance regarding matters of government investigations Corporate criminality and questionable practices Failure to identify areas of concern that could trigger governmental investigations Improper internal investigation and inefficient communication programs in times of crisis Failure to implementationfraud controls Inadequate execution of independent internal investigations Lack of regulatory awareness Lack of coordination between legal and other appropriate departments Competition Lack of understanding of the industry and market the organisation operates in Failure to comply with applicable anti-trust/pricing regulations Failure to understand and pursue benefits of anti-trust laws and regulations Financial Asset Investment Liquidity Inadequate funding and liquidity Inadequate analysis of market depth Inadequate working capital management Supply Chain Planning Architecture Information Technology Information Technology Architecture Business Continuity Management (BCM) Business Continuity Management (BCM) Inability Failure to implement security Failure to implement security Failure to implement a technology to implement a technologyto recover from a Failure Lack of data availability and data of data availability and data Lack Inadequate employment appropriate to the local business interruption controls controls appropriate to the local aligned with the organisation’s aligned with the organisation’s integrity to accurately plan integrity to accurately plan standards (including lack of environment environment local strategy local strategy electricity) Compliance with local fair Compliance with local fair Inaccurate demand/supply forecast Inaccurate demand/supply forecast Ineffective Ineffective physical security risk Architecture is not aligned with Architecture is not aligned with employment practice is not employment practice is not physical security risk Lack of understanding of mitigation plans mitigation plans corporate strategy corporate strategy monitored monitored Inadequate capacity planningInadequate capacity planning where particular data resides Lack of communication and Lack of communication and processes and Inadequate processes and Inadequate System architecture design does System architecture design does within the Inability to determine and maintain to determine and maintain Inability enterprise training around employment training around employment policies to secure physical policies to secure physical not include data management, include data management, not optimum safety stock optimum safety stock standards standards assets assets integrity, security and privacyintegrity, security and privacy Lack of proper planning for requirements requirements critical infrastructure Theft of assets Theft of assets disruptions Inability to develop a business Inability to develop a business Inadequate employment standards Training & Development Training & Insufficient insurance Development Ineffective/inadequate training and development programs Ineffective/inadequate training and development programs Intangible Assets Lack of adequate programs Lack of adequate programs for continued employability for continued employability of employees of employees Copyright/trademark infringement Training and development Training and development program not aligned with program not aligned with trade secrets Theft of business plans business plans Production Insufficient insurance Production driven architecture driven architecture Inability to recover data Inefficient warehousing/ Intangible Assetsinventory management processes Inefficient warehousing/ Records inventory management Management processes Records Management Contracting & Outsourcing Lack of understanding of where particular data resides within the enterprise Lack of proper planning for critical infrastructure disruptions Inability to recover data Contracting & Outsourcing Lack of holistic data management leading to inaccurate assessment of which business processes should be outsourced Poor security and privacy controls of outsourced data Contractual inability to review security and privacy practices Labour Relations Inability to procure goods/raw Inability to procure goods/raw Improper production planningImproper production planning effectively andmaterials cost effectively and Technology materials cost Information Security constrain volatile material costs constrainInformation Security volatile material costs Licensing Poor labour conditions Inadequate capacity planningInadequate capacity planning Ineffective engagement with Ineffective engagement with Inadequate supplier selectionInadequate supplier selection Lack of data integrity and/ Inappropriate location and/or Inappropriate location and/or labour unions and local labour unions and local process process Lack of data protection controls of data protection controls quality of Lack or data inefficient operation of assetsinefficient operation of assets authorities authorities increases vulnerability to attack increases vulnerability to attack technology licensing data Over-reliance on sole source Over-reliance on data leakage, either and sole source and data leakage, either Significant adverse conditions Significant adverse conditions vendors vendors externally or internally externally or internally in collective bargaining in collective bargaining Failure to comply with agreements agreements legal Personal Safety Personal Safety Inability to monitor contract Inability to monitorof physical/logical security of physical/logical securityrequirements Lack contract Lack Poor labour dispute resolution Poor labour dispute resolution compliance and sustain compliance and sustain Failure to constantly process process sourcing savings sourcing savings of segregation of duties Lack of segregation of duties Lack review the applicable Inadequate personal safety Inadequate personal safety legislation and insurance and insurance Inadequate quality to goods/ Inadequate quality to goods/ Failure to implement adequate Failure to implement adequate raw materials raw materials information security procedures information security procedures unlicensed and Use of Organisation Organisation Lack of adequate processes Lack of adequate processes and technologies and technologies inappropriate software for periodic review, Structure Structure for periodic review, communication and communication and enforcement of health and enforcement of health and Delivery Delivery Unclear lines of authority Unclear lines of authority safety policies safety policies Poor labour conditions Abuse of authority Inability to recover from a business interruption (including lack of electricity) Lack of operational uniformity Lack of operational uniformity across production facilities across production facilities Lack of holistic data Copyright/trademark of manufacturing flexibility of manufacturing flexibility Lack Lack Improper management of records Improper management of records management leading to infringement to react to disruptions to react to disruptions inaccurate assessment of Failure to maintain security Failure to maintain security which business processes Theft of trade secrets Inadequate quality control Inadequate quality control should be outsourced measures measures Failure to comply with legal and Failure to comply with legal and Lack of labor Lack of labor contracts Inappropriate outsourcing of Inappropriate outsourcing of contracts tax requirements tax requirements Poor security and privacy the training and the training and controls of outsourced data Underutilisation of intangibles Underutilisation of intangibles development function development function Lack Sourcing Sourcing Lack of data retention policies and of data retention policies and procedures procedures Contractual inability to review security and privacy Complex import and customsComplex import and customs Utilisation Utilisation practices regulations regulations Labour Relations Records & Information Management Financial Information Availability Human Resources Corporate Assets Abuse of authority Non-compliance with applicable laws and Inappropriate delegation of Inappropriate delegation of regulations authority authority Non-compliance with of physical infrastructure Lack Lack of physical infrastructure Project Management applicable laws and hindering transportation hindering transportation regulations Technology Licensing Lack of data integrity and/ or data quality of technology licensing data Failure to comply with legal requirements Failure to constantly review the applicable legislation Use of unlicensed and inappropriate software Project Management Unreliable third party logistics Unreliable third party logistics Inappropriate distribution of Inappropriate distribution of Failure to monitor, communicate, (3PL) service providers (3PL) serviceFailure to monitor, communicate, providers decision-making authority decision-making authority and report on project progress report on project progress and Taxation Taxation Failure to optimise lead time for Failure to optimise lead time for Failure Failure supplies/distribution supplies/distribution to obtain proper approvals to obtain proper approvals and stakeholder buy-in and stakeholder buy-in Excessive tax valuations of Excessive tax valuations of Incorrect or delayed deliveries Incorrect or delayed deliveries property property Failure to identify, Failure due to inaccurate/incomplete due to inaccurate/incomplete prioritise, report, to identify, prioritise, report, and customer data customer data manage project goals and manage project goals Failure to minimise tax Failure to minimise tax costs of acquiring and costs of acquiring and locating physical assets and locating physical assets and facilities facilities The Passport Mask Region: West and Central Africa Material: Clay, paint These masks were used to safeguard and identify travellers. Each African society was protected by a principle mask and miniature replicas were made to protect members of that society. These were worn on the upper arm and could be concealed under a strip of cloth to maintain secrecy, or exposed to reveal identity.