Known as the home to bands of seafaring pirates, Somalia now holds the dubious title of the riskiest country in which to conduct business and manage supply chains. Maplecroft, a United Kingdom-based risk-analysis firm, conferred that designation on Somalia on the basis of its 2009 Global Risks Index, which assessed 163 nations on 26 risk factors. Analysts evaluated such areas as a country's macroeconomics, security, governance, resources, diseases, climate change, and societal resilience.
Located on the horn of Africa, Somalia was rated an extreme risk in 16 out of the 26 criteria. In fact, eight of the 10 riskiest countries on Maplecroft's list lie on the African continent. "With poor public infrastructure, weaker governance, less available health care, the burden of malnutrition, and other communicable diseases, the countries of sub-Saharan and central Africa are the worst-positioned to address exogenous global risks," analysts said.
In addition to Somalia, said Maplecroft Chief Executive Alyson Warhurst, Nigeria, Sudan, the democratic Republic of the Congo, and Zimbabwe stand out as places where the supply chains of companies working in the extractive and commodities industries are most exposed to risk. To safely continue doing business in such dangerous locales, she said, companies need to put in place policies, procedures, and contingency planning for change and uncertainty.
Maplecroft designed its risk index for multinational organizations that are confronted by complex global risks traditionally seen as being external to business. The index helps companies detect and manage specific areas of high risk in international supply chains and operations.
The top 10 riskiest countries
3. Democratic Republic of the Congo
Source: Maplecroft Global Risks Report, 2009