Unemployment tops risk list for South Africa

Structurally-high unemployment and underemployment tops the risk list for 2018 in South Africa, according to the 2018 Risk Report from the Institute of Risk Management South Africa (IRMSA).

Also in its top ten list of risk by impact, revealed today, are unmanageable fraud and corruption, failure of governance, government policy, macroeconomic developments and profound political instability.

In terms of most likely risks, structurally-high unemployment and underemployment again tops the list, which also includes fraud and corruption. However, growing income disparity is listed at number three in terms of likelihood – South Africa already has one of the largest gaps between rich and poor of anywhere in the world.

Looking at risk readiness, risk managers change the order a little but fundamentally list the same issues – unemployment, growing income disparity and the failure of the state, followed by unmanageable fraud and corruption.

IRMSA president Berenice Francis said: “South Africa in 2018 and beyond remains an uncertain place for business, organisations and individuals.

“As risk professionals, uncertainty is our bread and butter – it provides us with the opportunity to set frameworks and asses strategies. Yet, given the level of uncertainty and the plethora of news coming from our ever-more connected world, how do organisations distinguish between noise and fact?”

She suggested risk management must lead the board agenda and play a prominent role in all discussions, decisions and strategy.

Ms Francis added: “It is not too difficult for a risk manager to focus on and ensure compliance. Slightly more challenging is [the ability] to report and present the risk profile to an organisation and to have the discussions around sensitive risks or why risk responses are not effective.”

Christopher Palm, chief risk adviser at IRMSA, stressed: “Risk managers should increasingly become the ones that speak the unspeakable, take up the role of mind changers that influence leadership and embrace the benefits that big data can offer risk management.”