The latest Allianz Risk Barometer report for 2024 classifies changes in legislation and regulation, cyber incidents, and macroeconomic developments as the top threats to businesses in Nigeria.
This report, coming from the 13th edition of the Allianz Risk Barometer was compiled with inputs from a diverse team of risk management experts (including risk consultants, underwriters, senior managers, claims experts, as well as other risk management professionals), about 3,069 respondents, spread across over 92 countries and territories. It presents a detailed analysis of the business risks expected globally.
For Nigeria in particular, the spotlight is on some unique challenges as the report noted:
- “Macroeconomic developments rank as the top risk for the second year in a row, alongside changes in legislation and regulation and cyber incidents.”
Regarding changes in legislation and regulation, Nigeria is ranked third on the list of top four countries at risk, with China and Morrocco taking the first and second spots.
Nigeria is rated 12th on the list of the top 17 countries at risk of cyber incidents, with Argentina, Australia and Austria taking the top three positions.
On macroeconomic development risk, Nigeria is fifth among the top six countries at risk as Bulgaria, Cameroon and Ghana take the lead.
Other risks in Nigeria
Diving into the specifics, the report highlights that the trio of legislative and regulatory changes (including tariffs, economic sanctions, and protectionism), cyber threats (including cybercrime, IT network and service disruptions, malware/ransomware, data breaches, fines, and penalties), and macroeconomic developments (including inflation, deflation, monetary policies, austerity programs) collectively pool a significant 36% in the risk survey report. These are closely followed by market development risks (including intensified competition / new entrants, market stagnation, and market fluctuation), a relatively new entrant to the list, capturing the fourth position at 20%.
The fifth slot is occupied by risks associated with climate change, alongside the perennial issues of theft, fraud, and corruption. Not far behind, in the seventh position, are political risks and violence. The energy crisis, new technologies and business interruptions complete the list of top 10 threats to businesses in Nigeria for 2024.
More Insights
For Nigerian businesses and stakeholders, this report serves as a crucial roadmap for navigating the unpredictable waters of 2024.
Earlier, the renowned rating agency, Fitch Ratings, said that increased regulatory actions may lead to a downgrade rating for Union Bank of Nigeria as the Central Bank of Nigeria (CBN) recently dissolved the bank’s board and management.
In a press statement announcing the publication of the report, Allianz Commercial CEO Petros Papanikolaou said:
- “The top risks and major risers in this year’s Allianz Risk Barometer reflect the big issues facing companies around the world right now – digitalization, climate change and an uncertain geopolitical environment.
- “Many of these risks are already hitting home, with extreme weather, ransomware attacks and regional conflicts expected to test the resilience of supply chains and business models further in 2024. Brokers and customers of insurance companies should be aware and adjust their insurance covers accordingly.”
