Capitalising on the opportunity for growth

African economists and politicians position themselves and their countries in the line of strong growth across the continent, with risk managers also keen to capitalise on the opportunities that come along with emerging economies. This was the overriding sentiment at the inaugural ceremony of the Nigerian Risk Awards on 5 December in Lagos, where members of the country’s risk management industry gathered together to celebrate their achievements. The event was organised by Conrad Clark Nigeria, a risk and management consultancy company.hideIn his opening address the chief executive of the company, Joachim Adenusi, said that the awards ceremony had been established to celebrate individuals and organisations that have striven to use creative means to minimise threats and maximise opportunities. He further added that: “In developed countries, [when] political leaders make promises to electorates they have several objectives that they would like to achieve. The biggest danger to any organisation or establishment is to have objectives that you are unable to fulfil, promises that you are unable to deliver on. “By careful planning and rigorous implementation and effective reporting on governance and communication, they are able to implement those actions. And hence the probability of success is quite high.” The winner of the risk manager of the year award Adebola Surukat, Enterprise Risk Manager for Mansard Insurance, gave a nod to how far the industry has come. When she received her award she said: “The award is a victory for risk management in Nigeria.” Lamido Sanusi, Governor of the Central Bank of Nigeria, spearheaded risk-based reforms to regulate the banking and financial sector when the industry was in turmoil in 2009. For his efforts he was awarded a special recognition award, in absentia. Mr Sanusi’s coming departure as head of the central bank—after four years in the position—is causing investors to worry. His exit in June 2014 comes before the country heads to the polls to vote in presidential elections in 2015. This is a time when government spending normally shoots up. One of the guest judges, David Hillson, a UK-based risk consultant known as the ‘Risk Doctor,’ spoke of using risk in nation building and the uncertainties that can affect the process which, amongst many things, includes conflicts of interest. His comments come at a time where the north east of the country is embroiled in conflict between the military and militant group Boko Haram. In his presentation Mr Hillson said that the key factors to consider in nation building is that a country needs to protect its people and land, provide for the population, persevere in the long-term task of nation building and also serve the public and not the individual interests of a select few. He pointed out that it is not just the government that has to take responsibility to assess the risks involved in nation building but also its business leaders. Mr Hillson said that countries should take steps to: “Build something which respects the past, recognises all the good things that are in our culture and in our traditions which protects the present...and secures and ensures the future.” One of the largest risks discussed during the event was Nigeria’s local content bill that was signed into law in 2010. This law attempts to ensure that local people and companies are used for development, particularly oil and gas, before international companies step in. Representing the ministry of petroleum resources, the executive secretary of the Nigerian Content Development & Monitoring Board, Ernest Nwapa, commented that the act was seen as a risk to many multinationals but has proved to be beneficial to the country. Adewale Osinowo, Director General of Lands and Surveys for Ogun State, cited an example in his own state of how risk management has led to development. In October the demolition of property began to make way for the construction of the 32km Sango-Ijoko-Akute-Alagbole Road. “Despite the destruction,” he said, “people have seen that it satisfies the loss they have made as something that can give way to a better tomorrow.” The state government is still in the process of paying compensation to property owners and companies who were moved from their homes and places of business to make way for the road. Nigeria’s insurance sector on the rise In November the National Insurance Commission of Nigeria (NAICOM) announced that insurance premiums are set to increase to more than $6.3bn in the next five years from $1.6bn in 2012. Despite the growth the market is still largely untapped. Only 14% of the population has any kind of insurance according to a poll by NOI Polls in Nigeria. But this has not stopped Nigeria from being regarded as the leader in insurance in the west African region. In December at the annual West African Insurance Companies Association conference insurers advocated for the removal of trade barriers and the establishment of the necessary framework to support liberalisation. Stakeholders said implementation will boost cooperation and further integration in the sub-regional insurance industry of the five English-speaking countries which are Nigeria, Ghana, Sierra Leone, Liberia and Gambia. It will also boost the region’s GDP, forecast the industry experts. On behalf of NAICOM, director of the commission Barineka Thompson said that he expects the west African insurance sector to take advantage of the opportunities. He added that the region could pool its savings and build financial infrastructure together to further grow each country’s economies as well as develop products and services and enhance underwriting capacity in order to curb the amount of money lost as a result of capital flight, particularly in the areas of oil and gas. In a recent report from the United Nations Commission for Economic Affairs it was found that some 60% of illicit financial flows that leave the continent comes as a result of commercial transactions with multinational companies. Some 5% is said to be lost because of corruption. Through its local content act Nigeria inspired fellow oil-producing nation Ghana to enact a similar bill. In November Ghana’s parliament passed a law that amongst many things requires oil companies to seek the services of local insurance companies to underwrite their activities.

Capitalising on the opportunity for growth

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