Security Risks and Investment Stability: A Comparative Analysis of Foreign Companies’ Experiences in West Africa

Abstract

This study examines how security risks influence foreign direct investment (FDI) decisions and operational stability for foreign companies operating in West Africa. Focusing on six countries—Nigeria, Ghana, Côte d’Ivoire, Senegal, Liberia, and Sierra Leone—the research analyzes the impact of terrorism, maritime piracy, corruption, kidnapping, and political instability on investment behaviour. Using a comparative case-study approach, the study evaluates how these risks shape entry strategies, project timelines, staffing decisions, supply-chain structures, and long-term business commitments. The findings reveal that terrorism and piracy contribute to operational disruptions and higher insurance and logistics costs, while corruption and weak institutions create regulatory uncertainty that discourages long-term capital deployment. Kidnapping risks further influence expatriate management and workforce arrangements, particularly in high-risk areas. Overall, security threats raise the cost of doing business, reduce investor confidence, and push firms toward risk-mitigation practices such as phased investments, enhanced security measures, and contractual protections. The study concludes that improving governance, strengthening security cooperation, and enhancing rule-of-law mechanisms are essential for attracting sustainable investment and ensuring business stability across the region.