Risk Assessment Of Chinese Construction And Engineering Firms In Africa

Construction is one of the main strongholds for development in every country. Its riskassessment is very vital and of prime priority. It is a procedure of fixed assets formation forthe economy and an effective construction project determines and expresses economic powerand social influence at the national and international front. Many countries in Africa in thepast years have been plagued with a chain of unfortunate incidences like war leading to otherunpleasant setbacks. This has stunted its general growth and development for a long period oftime. In recent years development has been rapid and the technological take-off outstanding invarious countries in Africa.To address it‘s developmental deficiencies countries in Europe, America, and Asia havebeen contacted and contracted to bring in their expertise and savoir-faire to improve andfacelift the image of the African continent. Along these lines of technological anddevelopmental infusion in Africa, China which has recently become an economic giant on theglobal platform is fast becoming the main resource that is being reached to undertake diverseprojects. The shift from one continent to another for construction projects comes along withits risks, threats and uncertainties that must be stringently addressed and adhered to in order toavoid unpleasant ramifications. Risk assessment is a major component in risk management. Itnormally come into context when the risks associated with a project are assessed to determinewhat hazards are likely to occur, who could possibly be harmed and how they may be harmedby the risks that have been assessed. It also considers what current or proposed steps are beingtaken and should be taken to reduce those risks. In addition the person or persons responsiblefor the actions are noted in the risk assessment. The objective of the research is basically toidentify and establish the most critical aspects of safety management that influences many ofthese Chinese engineering firms in Africa. It also gives a case study on Ghana andsubsequently identifies and adopts risk assessment methods to ameliorate and improve safetyat various construction sites.Through comprehensive literature review, risk assessment of international constructionprojects in other countries and their accompanying risks were identified and studied. Differentways of reducing these risks were also assessed. The engagement of China embarking onmulti-level construction projects in many African countries was also reviewed in this study.By the adoption of questionnaire surveys and statistical analyses in Ghana, being the countryused as a case study, risks encountered by Chinese Engineering Firms (CEF) in Africa wereidentified, assessed and ranked. For the analysis, graphs of the types and categories of risks examined were alsodisplayed to give a pictorial outlook of the various kinds of threats being faced or likely to beencountered by the Chinese Firms in Africa. The study revealed that loss incurred due topolitical changes, loss due to rise in fuel prices and poor communications between clientswere among the highly ranked risks. Among the average risks were increase of material price,cost increase and material shortage. The least encountered risks were breach of contract byproject partner and loss due to fluctuation of interest rate. This is clearly understandable sincemost of the projects undertaken by the Chinese firms are hugely financed and subsidized bythe Chinese government so they dictate their own interest rate for the countries. Some of thesuggestions made to address these risks were actually for these firms to refrain from politicalinterferences and partisan activities and also make sure that when signing agreements forconstruction projects there are national policies and agreements for construction projects tocontinue irrespective of the change in government. This is a very important factor becausemost projects that go on in Africa and Ghana for that matter are politically driven andmotivated.Though the risks were ranked, the effect and consequence must not be compromised andmust be given maximum attention. The research findings help to enlighten and outline variousrisk factors to the Chinese firms who are making their way into Africa for developmentalprojects and gives pragmatic steps to reduce these risks and ameliorate safety in Constructionby the Chinese Engineering Firms (CEF) and other stakeholders. It was found that the criticalrisk factors for Chinese construction companies in Ghana are technical, political, market andlanguage risks. These findings may also be useful to other firms in Asia and those fromdifferent continents since some of the risk factors examined are more general in nature.Apart from the practical applications of the research, it has a beneficial usage inacademia. Different aspects of risk management are elucidated and the history of earlyconstruction in Africa and China are distinctively outlined. Although there have beenabundant research on risk assessment in general, there are very few attempts of riskassessment of construction in Africa and almost none on Ghana. Therefore, the researchfindings of this study can enrich and improve the contents of other related topics or subjects.