Identification and Assessment of Key Political Risk Factors Influencing Corporate Performance of International Construction Companies in North- Eastern (NE), Nigeria

Document Type: Original Paper

Authors

1 Department of Quantity Surveying University of Benin

2 Department of Quantity Surveying, Faculty of Environmental Sciences, University of Benin, Benin, Nigeria.

Abstract

 International construction companies have settled in Africa and especially Nigeria, to compete for infrastructural projects, in a bid to extend their services across their borders. The trans-border extension of the services offered by these international multi-nationals exposes them to the political risk factors pertinent with the host country. In order to survive the harsh realities of the political risk indicators operational in Nigeria, especially the north-eastern part of the country, that has been plagued with civil unrest associated with the terrorist operations of Boko haram, it has become necessary to identify and manage these risk factors, to ensure the continuous survival of international construction companies in Nigeria. This paper seeks to identify and assess the prevalence of these political risk factors influencing the corporate performance of international companies operating in the North-east of Nigeria. Data for the s tudy was collected through structured questionnaires administered to 78 expatriates project managers from 6 international construction companies in the 6 states in the North East of Nigeria. Collected data was analyzed using relative importance index and factor analysis. Findings revealed that terrorism, corruption, insurrections, sabotages and kidnapping were the top five risk factors with the highest frequency of occurrence. It was also revealed that terrorism, kidnappings, sabotages, corruption and change in government are the risk factors with the highest impact on operations in the region. It is therefore recommended for the federal, state and local Governments to provide security for lives, properties and investments, companies should do more corporate social responsibilities and purchase political risk insurance cover to minimize their losses

Keywords