Risk Analysis in Rwanda's Special Economic Zones

This assignment examines the potential risks involved in establishing a business within Rwanda's Special Economic Zone. It utilizes PESTEL analysis to identify key factors such as political, economic, social, technological, environmental, and legal influences that could impact profitability and reputation. The analysis highlights the importance of conducting thorough risk assessments before venturing into these zones, emphasizing strategies for mitigating potential challenges.

RISK ASSESSMENT
OF
INTERNATIONAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTEL Analysis.......................................................................................................................3
Risk involved in business operations..........................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In this report, the concept focuses on the risk assessment of international business so that
risk assessment has to be done with the help of PESTEL analysis. C&H Garment is the firm who
is about to invest in the RWANDA special economic zone, it offers various incentives like
liberal and simplified economic regulations for establishing the business (Ballestas and et.al.,
2015). The business risks that are results of various organizational failure, are also discussed in
this framework. Rwanda is a small land in South Africa where the special economic zone is
business in Rwanda SEZ.
MAIN BODY
PESTEL Analysis
The risk assessment in establishing a new business in Rwanda special economic zone can
be done on the basis of various factors. The risk % in a business should be minimus so to
minimise the chances of risk in the business operations. . The risk can be assessed by carrying
out the the PESTEL analysis of Rwanda special economic zone (Nduwayezu and et.al., 2014).
The factors are shown below:
Political: The political background of Rwanda is quite unstable; they are focusing on
growing their economy from the last so many years. They are motivated to reduce poverty and
people resistance from the place. The political factors impact their economy because still the
Rwanda is considered as the low income nation. The political face of Rwanda is enhanced due
to the foreign exchange through production thus C&H Garment can face huge of risk in the
architecture development of their business (Moses and Etuk, 2015).
Economic: Basically, the economy of Rwanda is stable now and in past decades their
economy suffered due to civil war and genocide but after introducing the SEZ in Rwanda the
economic status has witnessed growth of 8 %, their foreign investment is centralized on the tea,
coffee, and tourism. The change in exchange rate can increase the risk of economic growth of
C&H garment.
Social: Social background of this Rwanda is based on orthodox mentality. The
population of Rwanda is from rural area in which 52% of population is of women. The people
are living in a traditional way and also 45% of total population is under poverty line so C&H

Garment may have the risk of producing fashionable clothes which may not be the preference of
people living in that area .
Technological: The SEZ already have many organizations with latest technology for
smooth operations of their working. The C&H have to have more funds for implementing the
latest technologies in their workplace. If organization want to invest in the technology and
equipment, the risk regarding investors can be seen in the organization which can impact whole
structure of the firm organization (Kateera and et.al., 2015). If market changes more advanced
technologies come to the market so in such case the training and development program should be
provided to employees so forsuch activities the upcoming expanses can make differences in the
economy of C&H so this can be seen as a risk.
Environmental: The environment of Rwanda can be perfect for the organization because
the resources are enough to build a business structure. But the main problem is the population of
Rwanda; the consumption of resources like land, water and other non renewable resources is
high. The non renewable resources are consumed by people of Rwanda so the risk of land
degradation, soil erosion and loss of biodiversity can be witnessed by the C&H. The climate of
Rwanda changes ant time so the organization can see the risk of maintaining the current system
also the anticipation of the future changes should be needed.
Legal: The legislation on international business is strictly followed by the foreign
investors in SEZ. The organization have to comply with all trade rules and regulations applied by
government of the Rwanda (Rosa and et.al., 2014). The Rwanda special economic zone is carried
over by the trade act 1999 in which the various business laws are included. The legal limitations
of operations can be changed by the government so it can be considered as the risk for the
organization
Risk involved in business operations
Strategic Risk: In an organization, the management made so many strategies to conduct
various operations. The risk in strategy does impact on those operations of the organization. The
organization usually made the strategies based on the customer preference and the existing
technologies(Ballestas and et.al., 2015). If there is any shifting in that preference the line product
will be obsolete. Then the market will force the organization to make changes in their existing
plans thus it can make negative impact on the system of the organization. So if C&H garments

have made the mind to establish their marker in Rwanda SEZ then they may have the strategic
risk.
Compliance Risk: The government of that particular area in which the business unit have
made their base should have bureaucratic rule and regulations and some legislation. The
compliance risks are identified by the practices of investment. The regulations are made for the
protection of employee those are generated by the Occupational safety and Health
Administrations(Nduwayezu and et.al., 2014).There are some environmental concerns that are
answerable by the Environmental Protection Agency and some localities. So Rwanda SEZ is also
bounded with such regulation and legislation so the risk which are associated with the
compliance, would be in system of C&H.
Financial Risk: The management of the money matters in the growth of an organization.
The business should know how to hold the money for the right investment. The credit given to
the customers should be not for long time. If the foreign exchange rate will be reduced then it
can make impact on the sales of organization. The export business will be paralyzed if
organization do international business. The financial risks can be seen as the interest rates into
account. The C&H have to handle their accounts properly otherwise there can be also some
financial risk(Moses and Etuk, 2015).
Operational Risk: If the internal system will fail to operate the various operations then it
will back in the form of operational risk. If there is any unexpected failure comes in the system
of the organization. If the employee are not working with the complete involvement then it will
be taken as the failure of human resource department. They do not given valuable training to
develop their skills. The operational risk will not give anything in return as this failure will be
highly risky for the organization(Kateera and et.al., 2015). Rwanda Special economic zone have
so many organization, and if any organization will have failure on their operational activities
then it can be more dangerous. Thus, C&H can also have this kind of risk in the Rwanda special
economic zone.
Reputational Risk: The organization have to maintain their image in the market by
providing good and effective products and services to the customer. The marketing strategies
will make impact on the reputation of the organization if there is any negativity in the way of
marketing. C&H have to evaluate the taste of people the trend in the market. In case the C&H
have not succeed in doing the proper market then it will decrease their market reputation. An

organization have to put so many efforts to make a better brand image. People of Rwanda are so
traditional so if they don’t like the products of C&H then will became a reputational risk. The
modern generation have social media so a negative response can reduce the sales of the products
and ultimately it will affect the profitability. If the SEO department of C&H fails in managing its
operations then it can also produce reputational risk(Rosa and et.al., 2014).
There are some more risk involved in this business operations. This kind of risk cannot be
identified so easily. The natural disasters and the environmental risks are included. The
prediction of these failure is quite difficult to conduct because it came suddenly in the system of
organization. If C&H have so many skilled employee that can make their business more
profitable, sometime the management of those employees been so difficult for the organization
that called as the employee risk management. The Occupational Safety and Health
Administration have not covered each health and safety risk, those exceptions are covered in this
category. The import and export operations will be grounded in the risk the guest country will
have instability in their political and economic factors.
CONCLUSION
In this context, the risk analysis has been done with the help of PESTEL analysis. It is
concluded that risk must be analysed before establishing the business in special economic zone.
The Rwanda special economic zone has so much exposure for the organization. The business
risk can be reduced by adopting proper evaluation techniques and making reliable strategies.
Each organization should carry out the risk assessment before locating their business.

REFERENCES
Books and journals
Ballestas, J.D. and et.al., 2015. Accuracy of a Statistical Risk Assessment Model in Predicting
Shoulder Dystocia and Brachial Plexus Injury in a High-Risk Population at Einstein
Medical Center, Philadelphia [133]. Obstetrics & Gynecology. 125. pp.47S-48S.
Nduwayezu, E. and et.al., 2014, May. Some aspects of risks and natural hazards in the rainfall
variability space of Rwanda. In EGU general assembly conference abstracts (Vol. 16, p.
14468).
Moses, E.A. and Etuk, B.A., 2015. Human Health Risk Assessment of Trace metals in Water
from Qua Iboe River Estuary, Ibeno, Nigeria. Journal of Environmental and Occupational
Science. 4(3). pp.150-157.
Kateera, F. and et.al., 2015. Hepatitis B and C seroprevalence among health care workers in a
tertiary hospital in Rwanda. Transactions of The Royal Society of Tropical Medicine and
Hygiene, 109(3). pp. 203-208.
Rosa, G. and et.al., 2014. Assessing the impact of water filters and improved cook stoves on
drinking water quality and household air pollution: A randomised controlled trial in
Rwanda. PLoS One. 9(3). p.e91011.