OPENING SPEECH AT WORKSHOP ON INVESTMENT APPRAISAL AND RISK ANALYSIS HELD AT EZULWINI SWAZILAND, 3RD DECEMBER 2012, BY DR VINCENT MHLANGA, CHIEF EXECUTIVE OFFICER OF SWAZILAND INDUSTRIAL DEVELOPMENT COMPANY LIMITED (SIDC)

Qualitative Risk Assessment Crucial in Credit Assessment – Dr. Mhlanga

Good morning!

Allow me please to welcome you to Ezulwini, Swaziland. I trust you are going to have a wonderful and memorable stay in the Kingdom. I am grateful indeed that you were able to come. 

It therefore gives me great pleasure to have been invited to the opening of this important workshop, that is so relevant to our times.

Post the 2008 credit crunch that beset world economies in every region, it is therefore only prudent that a workshop of this nature should take place. No doubt, this bitter experience has necessitated changes or a rethink in the manner in which investment and credit are handled by companies, in particular financial institutions.

 he risks that institutions face come from both the demand and supply side the equation.  Exporters do not know whether or not the importing companies are financially healthy enough to continue honouring their invoices.  The reverse is also true, as importers are not sure whether or not their important supplies will be available at all times. It is therefore very important that companies should try to mitigate these risks to acceptable to another levels. What is acceptable for one company is not necessarily acceptable to another company. This depends on the risk appetite of the individual companies.

The naked truth is that, it is impossible to run business without any form of risk. It is therefore imperative that one is able to identify the inherent risks that come with every project or opportunity, and then set out strategies to mitigate such risks so that they are within the company’s acceptable risk parameters.

It is appreciated that there are a number of methods to identify risk quantitatively. I trust you will learn a number of them within the given time frame. I would also like to draw your attention to the identification of risks qualitatively. Whilst the former may necessitate some number crunching yet the latter may not be identified numerically, yet its impact in today’s world is far reaching.

We are reminded of what is happened in the Eurozone where previously big economies are finding it difficult to come out of the woods, and their economies are still in the doldrums. The jury is still out, as to what will happen in the next future since a collapse of one of these countries would cause a major catastrophy world-wide because of the multiplier effect.

Ladies and gentlemen, the core intent of this course is to re-kindle your knowledge with regards to investment appraisal and risk analysis. Please pay special attention to case studies incorporated in this course, because from them you will see that investment appraisal is not cast in stone but that every project is unique and must be evaluated on its merits quantitatively and qualitatively.

Ladies and gentlemen, I encourage you to take advantage of this unique opportunity to network and share knowledge. This may trigger creative ideas that can benefit your individual institutions.

The economic revival of the region, and in some cases, the survival of number of these economies is dependent on your organisations represented in this room today. It is therefore true that our development is in your hands, hence the need to take opportunities like this one, you have, to-date seriously.

Ladies and gentlemen, once again, I welcome you to this beautiful and peaceful Kingdom.

 May God bless you all, I thank you.