“Nigeria faces macroeconomic challenges: low commodity prices, the Chinese slowdown and tightening of US monetary policy and also internal pressures such as inflation, weak domestic demand and socio-political tensions”.
Companies operating in Nigeria worry about the struggling economy, corruption, volatility and political risks and violence. Other concerns are digital dilemmas arising from new technologies and cyber risks, as well as government policies which do not enable businesses to thrive. These are the key findings of the Allianz Risk Barometer. Tough macroeconomic conditions and market volatility are the top two risks. “Nigeria faces macroeconomic challenges: low commodity prices, the Chinese slowdown and tightening of US monetary policy and also internal pressures such as inflation, weak domestic demand and socio-political tensions”. Companies in Nigeria need to invest more into monitoring politics and policy-making in 2017. Corruption is still a concern in the country. Corruption in Nigeria could cost up to 37% of GDP by 2030 if it’s not dealt with. This is nearly $2,000 per person by 2030. Political risks and violence is still a major challenge due to terrorism and kidnap for ransom (KNR). The overall risk for Nigeria in 2017 is high on crime, terrorism, conflict, political violence and kidnap. The resurgence of violence in the Niger Delta is expected to continue into 2017. Militant groups are likely to continue high-profile attacks on oil and gas infrastructure. Greater military action risks increasing anti-government sentiment. “Companies worldwide are bracing for a year of uncertainty”. Unpredictable changes in the legal, geopolitical and market environment around the world are constant risk items. “Cyber incidents is ranked #5 in Nigeria with the most common threats being from hackers, disgruntled employees, negligence and competitors”, says Nobuhle Nkosi, Head of Financial Lines AGCS Africa. Businesses need to think about data as an asset and what prevents it from being used. Results also show that smaller companies may be underestimating cyber risk.