An Allianz Risk Barometer 2020 report released on Tuesday shows that Nigerian businesses are concerned about the economy and corruption.
Macroeconomic Development got 36 percent of the total response, followed by corruption which got 34 percent, to become first and second most important business risk in Nigeria, relegating Changes in legislation and regulation to fifth place, according to the ninth Allianz Risk Barometer 2020.
The two risks have been in the top 10 since the launch of the Allianz Risk Barometer in Nigeria in 2017 with Macroeconomic developments topping the inaugural report until slipping down to 9th in 2019.
Globally, Macroeconomic developments is a new entry in the top 10 risks for 2020 (11 percent), driven by corporate fears over a global recession and debt accumulation, particularly in the US and China, notably with regards to the private sector.
The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of a record 2,718 experts in over 100 countries including CEOs, risk managers, brokers and insurance experts.
Economic growth showed no sign of an acceleration in Q3, reaching +2.3 percent year on year which results in approximately zero growth per capita, which is well below the +6% growth rates registered since 2014.
“In Q3, as during the last two years, growth was achieved in only about three sectors: Agriculture (non-processed agrifood which accounts for only 4 percent of the Nigerian GDP), crude oil (non-refined oil which represents just0.1 percent of GDP) and telecoms.
Informality can be one reason, but this is obviously not the only one since manufacturing and construction output are stagnating, the report says.
For the time being, the relaxation of credit constraints implemented during last summer has failed to translate into more credit demand,” says Stéphane Colliac senior economist for France and Africa at Euler Hermes.
Theft, fraud and corruption was second with 34 percent of responses, and has always featured in the top 10 rankings since the launch of the Allianz Risk Barometer in Nigeria. The risk moved up one spot to second place in 2020. Nigeria along with other Sub-Saharan Africa countries scored the lowest on the Corruption Perception Index 2018, and has not yet succeeded in translating its anti-corruption commitments into any real progress. However the index noted that despite stagnation across the region, there are some promising political developments, particularly in Nigeria, Angola, Kenya, and South Africa.
Business interruption – an undiminished threat with new causes is also a concern in Nigeria now. After seven years at the top, BI drops to the second position globally in the Allianz Risk Barometer. In Nigeria, BI leaped from seventh to third this year and is number one in Africa and Tanzania; two in Cameroon and South Africa and four in Ghana. The trend for larger and more complex BI losses continues unabated, says the report.