IDENTIFICATION AND ASSESSMENT OF KEY POLITICAL RISK FACTORS INFLUENCING CORPORATE PERFORMANCE OF MULTINATIONAL CONSTRUCTION COMPANIES IN NORTH-EASTERN, NIGERIA

Abstract

Multinational construction companies settled in African countries, 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 multinationals exposes them to the political risk factors pertinent within 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 political risk factors influencing the corporate performance of international companies operating in the North-east of Nigeria. Data for the study was collected through structured questionnaires administered to 78 expatriate project managers from 6 international construction companies in 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 that the federal, state and local governments should provide security for the lives, properties and investments in the region, companies should do more corporate social responsibilities and purchase political risk insurance cover to minimize their losses.

Adebiyi, O. J. | Department of Quantity Surveying, University of Benin (UNIBEN), Benin City, Edo State, Nigeria.