Consultancy Strategies in the MENA Region for Managing Risks
In the rapidly evolving landscape of the Middle East and North Africa (MENA) region, investors and traders face a complex array of political, economic, and security risks. To help navigate this challenging environment, The Risk Advisory Group (TRAG) has established a new practice in its London office, focused on providing integrated risk consultancy and advisory services for businesses operating in the region.
**Political Risks:**
The MENA region remains highly sensitive to geopolitical tensions. Despite temporary ceasefires in late 2024 and early 2025, violence has resumed in Gaza and Lebanon, with ongoing fragility in other conflict-affected countries such as Yemen and Syria. Iranian-Israeli tensions, especially around Iran's nuclear program, continue to elevate the risk of military escalation with potentially severe regional spillovers.
**Economic Risks:**
Growth prospects in the MENA region are uneven and vulnerable. Non-GCC oil exporters face external sector pressures due to worsening trade balances, while job creation struggles to keep pace with the working-age population growth, particularly in Algeria, Egypt, Morocco, and Tunisia. Risks to the economic outlook are skewed toward the downside, with potential triggers including intensified global trade protectionism, tighter-than-expected global monetary policies leading to currency depreciations and capital outflows, and notably, any significant drop in oil prices beyond current forecasts.
**Security Risks:**
The security landscape in the MENA region is marked by acute risks, particularly centered on energy infrastructure and ongoing conflicts. The collapse of the Gaza ceasefire in March 2025 has escalated geopolitical volatility, threatening the stability of the region’s critical energy infrastructure and maritime shipping routes. Cross-border skirmishes involving Hezbollah, Houthi rebels, and Iranian-Israeli confrontations pose constant threats to pipelines, refineries, and storage facilities, risking broader disruptions to global energy supplies.
**Implications for Investors and Traders:**
The intertwining of fragile political stability, volatile security conditions, and economic uncertainties means investors must weigh the risk of sudden geopolitical shocks and economic slowdowns. While energy sectors face elevated risk due to supply chain vulnerabilities, the ongoing reforms and macroeconomic stabilization in some countries (e.g., Egypt, Morocco) offer potential opportunities, particularly if investors are prepared to navigate the heightened volatility and seek niche areas less exposed to conflict.
To lead this new practice, TRAG has appointed Martin Stone, an experienced professional with over 15 years in the Middle East-related consulting field. Martin has worked at Aon, Deloitte & Touche, and a management consultancy before joining TRAG. He will be supported by regional risk specialists Christina Corbett and Lucy Norton, as well as James Drummond, a former Financial Times correspondent in Baghdad and Cairo.
The new practice will also receive support from TRAG's joint venture partners in Saudi Arabia and Iraq for security risk management. This collaboration aims to provide the most comprehensive and locally informed risk consultancy services for investors and traders in the MENA region.
The MENA region, despite its challenges, presents significant opportunities for various business sectors, according to TRAG. Potential opportunities include oil and gas, construction, infrastructure, telecoms, consumer goods, and tourism industries. Cities such as Dubai, with significant development in financial services, tourism, and aviation, offer promising growth prospects.
For investors and traders seeking to capitalise on these opportunities, effective risk management and scenario planning have become essential. The new practice at TRAG is intended to help them navigate the risks inherent in the MENA region, ensuring they can make informed decisions and achieve sustainable growth.
Trade finance is crucial for businesses in the MENA region to foster economic growth and sustainability, especially in light of the potential triggers that may negatively impact the economic outlook discussed earlier. The role of a finance industry in facilitating trade finance is essential in managing risks associated with economic uncertainties and ensuring businesses can maintain and expand their operations.
In the energy sector, political risks, security concerns, and volatile economic conditions pose significant threats to energy industries in the MENA region and the global energy supply chain. Therefore, it's imperative for businesses operating in the energy industry to seek the advice of risk consultancy experts, such as The Risk Advisory Group, to help devise strategies to mitigate these risks and take advantage of potential opportunities offered by the region.
