Afghan crisis raises concerns in South Africa

The Taliban’s rapid takeover of Afghanistan has raised global risk antennae on several fronts and South Africa would do well to follow proceedings closely and with deep concern.

Pat Semenya, CEO of the Institute of Risk Management South Africa (IRMSA), said: “While indications of change in the country were evident for some weeks after the US announced its military departure, it was the speed of change that seemed to surprise the most.

“There are obvious parallels with what happened in South Africa recently during the attempted insurgency and how quickly the violence spiralled out of control. This must be a stark warning to risk professionals as to how quickly events can escalate and therefore to make sure that response and contingency plans are in place.”

Ms Semenya suggested that organisations reappraise their political risk plans with a view to ensuring safety and continuity. Among IRMSA’s recommendations are: making sure tactics are in place to prepare and protect staff; ensuring that supply chains can withstand unplanned disruptions; and reassessing all credit lines and risks.

She also said political risk insurance should constantly be evaluated and updated, and that risk professionals should also develop strategies around alliances with local companies to ensure a degree of herd safety and protection.

Ms Semenya added that organisations should have a clear understanding of the political environment they are working in and, where necessary, engage in consultations with government and political leaders.

The Afghanistan takeover has also raised the spectre once again of international terror attacks, as geopolitical experts are warning that the country could again become a breeding ground for extremists.

“While South Africa mercifully remains on the margins of any frontline terror threat, the shift in political power in Afghanistan has altered global dynamics and it’s imperative that South African leaders take note of this and factor it into medium- and long-term planning,” noted Ms Semenya.

IRMSA said there is no question that global financial markets will be affected in the coming weeks, as the situation in Afghanistan remains fluid and volatile. Investors, including those in South Africa, are watching closely to see how events unfold.

Ms Semenya sayid: “Given the current fragility of our economy and our urgent need for new foreign direct investment, international investor caution – while understandable – could result in decisions being postponed. If that happens, there are negative consequences in terms of South Africa’s growth trajectory.”

IRMSA said the fall of Afghanistan is a global event of significant importance and the effects will be felt for years to come. The crisis, said the institute, should be seen as a clear indication of how the social, economic, and political framework of the world is shifting and a salutary warning to risk professionals to have the right proactive strategies constantly in place.