23 Jun 2015

Verisk Maplecroft, a leading global risk analytics, research and strategic forecasting company, has released its 2015 annual Corruption Risk Index (CRI) which scores and ranks 198 economies on the prevalence of bribery and the effectiveness of official efforts to combat it to reveal the best and worst performing countries.

The Index has been described an effective tool affording investors with a snapshot of the corruption landscape at the global, regional and national levels.

In the index, Botswana was ranked as sub-Saharan Africa’s “best performer” with the lowest corruption risk on the continent. Sub-Saharan Africa, followed by Asia, was however identified as the region posing the highest risk to business of bribery. According to the 2015 CRI, the 12 highest risk countries in the world include six from Sub-Saharan Africa.

The report also cites current World Bank estimates that corruption adds 10% to business costs globally, with the equivalent of US$1 trillion paid in bribes annually. “These risks are particularly prevalent in developing economies,” states Trevor Slack, legal and regulatory analyst at Verisk Maplecroft, adding:

“Factors such as weak rule of law and a lack of institutional capacity in these markets undermine efforts to combat entrenched systems of patronage, while exposure to corrupt public officials and a reliance on third party agents is also higher.”

In its latest, 2014, country risk report for Botswana, Verisk Maplecroft has further reported that: “As one of the most stable and least corrupt countries in sub-Saharan Africa, Botswana is an attractive destination for foreign investment. Maplecroft’s Country Risk Report identifies emerging risks and opportunities for foreign investors by providing comprehensive assessments of governance risks, the economy, security, the legal and regulatory environment, human rights, labour standards and climate change.

“The ruling Botswana Democratic Party (BDP), which has governed the country since independence in 1966, has built its credibility on the prudent management of the country’s diamond wealth. However, the country’s reliance on capital-intensive, export-focused diamond mining means the economy is vulnerable to external shocks.

“While the economic outlook is fairly robust, efforts to diversify the economy have been mixed. The government offers various incentives to encourage foreign investment, particularly in the financial services sector, but competition with neighbouring South Africa has limited their success in this respect.” Ends