Political risk
This transpires when a country’s government unexpectedly changes its policies, which now negatively affect the foreign company. The Kenyan government is renowned for policy changes. A new bill passes almost daily, altering how things work.
There are issues such as tariffs and quotas which are used to protect domestic producers from foreign competition. This also can have a huge effect on the profits of an organization because it either cuts revenues from the result of a tax on exports or restricts the amount of revenues that can be earned. Although the amount of trade barriers have diminished lately due to trade agreements and other similar measures, the everyday differences in our laws can influence the profits and overall success of Dangote’s business.
Bottom Line
Dangote has proven to be a key strategy while investing in industries that target the masses. He might probably have everything figured out. But with the way things work in Kenya, it will be tough. My hope is that it works out. Cheap cement is welcome anytime. People are tired of arrogant landlords.
