By Ian Ortega
In 2021, Uganda closed the Democratic Governance Facility (DGF) over allegations of government subversion activities. Today, Uganda’s not-for-profit sector still struggles from the shocks of that incident, and many organizations never recovered. In October 2025, the office of the Auditor General (OAG) and National Planning Authority (NPA) halted the Strengthening Governance and Civil Society Programme (GCSP) funding pending clearance from the Attorney General.
In Tanzania, protests broke out amidst the General election exercise forcing businesses to temporarily halt operations. The point of all this is to illustrate the now-ever present elephant in every Chief Finance Officer’s room – Geopolitical risk.
Now more than ever before, the CFO ought to become fluent in the language of Geopolitical risk. But in also understanding the fact that geopolitical risk can emerge from anywhere at any point in time. You do not know where the next protest will come from, and what issue will be protested.
In the past, what CFOs have often done during their annual planning exercises was to do scenario and sensitivity planning. They would then model impacts based on different scenarios, for example, the optimistic scenario, the base scenario, or even the worst-case scenario. To this, some organizations would add their business continuity plans (BCPs) and have a forecast of the numbers based on different sensitivities.
However, Geopolitical risk presents a unique challenge because it often defies most risk-modelling. You couldn’t have modelled the impact of the on-going tariff wars, and if yes, where exactly they would hit. Take the example of wheat millers in Uganda. How do you model the impact of this on your wheat prices and ultimately how the consumers will react to increments in their wheat flour?
Some organizations are going extremely radical and establishing departments fully specialized to dealing with risk, anticipating risk, and this is what they do every day, keep listening to the signals long before everyone else understands what those signals mean. And Geopolitical risk will soon become the thing that separates one business for another. The businesses that fail to anticipate and mitigate against this risk will lose out to those that prepare for it.
And these preparations could also mean initiatives such as better cash-management. Cash and cash equivalents is now something to be tracked daily. If you do not have liquidity and a geopolitical risk emerges on one of your suppliers, it also means you can’t easily switch to an alternative. If this risk emerges on one of your distributors, it means, you risk defaulting on your own payments. Thus, businesses must now look at efficiencies and effectiveness of the cash collections.
Everyday, what a CFO must do, is to wake up and think about Geopolitical risk and whether their entity can emerge from that risk regardless of where and how it emerges. That’s the real role of the CFO now. There are consequences to neglecting or underestimating this risk.
And this is where CFOs must go granular and zoom into the details of every line on their cash flow statement, profit and loss statement, and the statement of financial position. Then, the CFO together with their team should go line by line and ask one question – “what would geopolitical risk look like for this line?” Does Geopolitical risk for example mean that your operations will be halted? Does it mean that all sudden, you must pay more interest on your debt? Does it mean that your pricing will be altered?
I have been speaking about risk precisely because this message must be drummed in the C-suite, so that everyone in that boardroom develops that strategic paranoia. It’s the paranoid that survive. The businesses that applied strategic paranoia to the Covid-19 pandemic, that approached it as something that had come to stay emerged better and stronger. Those that underestimated the pandemic are probably no longer here.
It’s also unfortunate that the average tenures of CFOs and CEOs have reduced over time thus killing the long-term approach to risk. Thus, businesses do not pursue initiatives that better cushion them against geopolitical risk in the long term. Instead, businesses are now left in reactionary tendencies, applying short term measures to long-term issues. Geopolitical risk is a long-term issue. And a CEO or CFO who is more worried about whether their contract will be renewed next year is disadvantaged when it comes to dealing with Geopolitical risk.
But on a positive, the tools are also becoming accessible. With a simple Artificial Intelligence tool, one can now perform a Monte Carlo simulation of their business, their industry and have a better understanding of the most likely scenarios. That’s also to say that Game theory more than ever is now alive and practical in the boardroom, and it would be futile to dismiss these kinds of exercises. The biggest threat to every business, every industry is now Geopolitical risk. The next generational CFO must have this kind of risk on their finger-tips, they must have an intuition for this kind of risk.
About Author: Ortega is a Manufacturing/Industrial Engineer, and Strategic Innovation Expert in the field of Energy Economics and Logistics.