Abstract
Multinational enterprises investing in Africa face varying degrees of political risk depending on the country of investment. In Lusophone Africa, specifically Mozambique and Angola, one could argue that MNEs encounter lower political risks investing in Mozambique compared to investing in Angola. This could be due to differences in the political landscape political stability, regulatory frameworks, and government transparency in the two nations. Mozambique's stable political environment, more predictable regulatory landscape, and higher levels of governmental transparency presents the country as having a better handle on the present political risks for MNEs looking to invest there. Whereas Angola's history of political volatility, indefinite regulatory practices, and lower levels of transparency elevate the impact of political risk for these foreign investors. The regulatory context in Mozambique has shown progress in becoming more business-friendly, with efforts to modernise business regulations and improve the ease of doing business especially with foreign investors. The Mozambican government has also engaged in robust reforms and interventions to attract more foreign direct investment. On the other hand, Angola's regulatory environment is often considered more challenging due to reported bureaucratic inefficiencies and corruption. The business regulations in Angola are less transparent and can be subject to abrupt changes, which adds to the unease that MNEs may have towards investing there. Although not fully transparent, the level of government transparency in Mozambique is higher, with ongoing efforts to improve governance and reduce corruption. International bodies and indices often rate Mozambique higher in terms of transparency compared to Angola. This dissertation examines the political risks faced by multinational enterprises investing in Africa, focusing specifically on a comparative analysis between Mozambique and Angola. The study aims to identify and evaluate the distinct political environments in these two countries, assessing how political stability, governance, and regulatory frameworks impact foreign direct investment. Through a qualitative approach, the research draws on case studies, articles and other existing literature to explore the nature of political risks. The findings from this study highlight the significant similarities and differences in the political landscapes of these two countries thus revealing how these variations influence MNEs' investment strategies and risk management practices. This analysis contributes to the broader understanding of political risk in emerging markets, providing insights that can guide MNEs in making informed investment decisions in
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environments such as Africa. It will also allow governments in these countries to make radical adjustments that can make them more attractive for investment.