Connect with us

Business

Businesses in Nigeria Concerned About Regulatory, Cyber, Economic Risks

Published

on

Entrepreneurial Index

Cyber incidents such as ransomware attacks, data breaches, and IT disruptions are the biggest worry for companies globally in 2024, according to the Allianz Risk Barometer.

The closely interlinked peril of Business interruption ranks second. Natural catastrophes (up from #6 to #3 year-on-year), Fire, explosion (up from #9 to #6), and Political risks and violence (up from #10 to #8) are the biggest risers in the latest compilation of the top global business risks, based on the insights of more than 3,000 risk management professionals.

Businesses in Nigeria concerned about regulatory, cyber, and economic risks

In Nigeria, the report highlights the increasing worries surrounding Changes in legislation and regulation, Cyber incidents, and Macroeconomic developments, which have emerged as joint top risks with 36% of responses.

Changes in legislation and regulation climbed up from the fourth position in 2023 to become one of the most pressing concerns for reflecting the evolving regulatory landscape and the need for companies to adapt to new policies and compliance requirements.

Yomi Onifade, the Managing Director/Chief Executive Officer of Allianz Nigeria, stated, “The changing regulatory environment poses significant challenges for businesses in Nigeria. It is crucial for companies to stay updated and ensure compliance to mitigate potential risks.”

Cyber incidents have also risen in prominence, moving up from the third spot in 2023 with businesses recognizing the urgent need to enhance their cybersecurity measures to protect sensitive data and maintain operational continuity.

Onifade emphasized, “With the increasing reliance on digital platforms, businesses must prioritize cybersecurity to safeguard their operations and customer information. Failure to do so can have severe consequences.”

Macroeconomic developments have maintained their position as a top risk, indicating the ongoing challenges faced by businesses in navigating economic uncertainties and volatility.

Onifade added, “The Nigerian business landscape is constantly evolving, and companies must be prepared to adapt to changing economic conditions. A robust risk management strategy is essential to mitigate the impact of macroeconomic challenges.”

Allianz Commercial CEO Petros Papanikolaou comments on the findings: “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.”

Large corporates, mid-size, and smaller businesses are united by the same risk concerns – they are all mostly worried about cyber, business interruption and natural catastrophes.

However, the resilience gap between large and smaller companies is widening, as risk awareness among larger organizations has grown since the pandemic with a notable drive to upgrade resilience, the report notes.

Conversely, smaller businesses often lack the time and resources to identify and effectively prepare for a wider range of risk scenarios and, as a result, take longer to get the business back up and running after an unexpected incident.

Trends driving cyber activity in 2024

Cyber incidents (36% of overall responses) rank as the most important risk globally for the third year in a row – for the first time by a clear margin (5% points). It is the top peril in 17 countries, including Nigeria, Uganda, Kenya, Mauritius, Australia, France, Germany, India, Japan, the UK, and the USA. A data breach is seen as the most concerning cyber threat for Allianz Risk Barometer respondents (59%) followed by attacks on critical infrastructure and physical assets (53%). The recent increase in ransomware attacks – 2023 saw a worrying resurgence in activity, with insurance claims activity up by more than 50% compared with 2022 – ranks third (53%).

“Cyber criminals are exploring ways to use new technologies such as generative artificial intelligence (AI) to automate and accelerate attacks, creating more effective malware and phishing. The growing number of incidents caused by poor cyber security, in mobile devices in particular, a shortage of millions of cyber security professionals, and the threat facing smaller companies because of their reliance on IT outsourcing are also expected to drive cyber activity in 2024, “explains Scott Sayce, Global Head of Cyber, Allianz Commercial.

Business interruption and natural catastrophes

Despite an easing of post-pandemic supply chain disruption in 2023, Business interruption (31%) retains its position as the second biggest threat in the 2024 survey. In Nigeria, Business interruption moved down from #9 to #10. It ranks in the top five risks in Africa and the Middle East, Ghana, Kenya, Senegal, South Africa, Uganda. This This result reflects the interconnectedness in an increasingly volatile global business environment, as well as a strong reliance on supply chains for critical products or services. Improving business continuity management, identifying supply chain bottlenecks, and developing alternative suppliers continue to be key risk management priorities for companies in 2024.

Natural catastrophes (26%) is one of the biggest movers at #3, up three positions. 2023 was a record-breaking year on several fronts. It was the hottest year since records began, while insured losses exceeded US$100bn for the fourth consecutive year, driven by the highest ever damage bill of US$60bn from severe thunderstorms.

In Africa and the Middle East, natural catastrophes have emerged as a new risk, ranking at #6. Notably, Morocco witnessed a significant rise in this risk, climbing from seventh to first place. Cameroon and South Africa also experienced a surge in natural catastrophe risks, ranking among the top five risks in these countries.

Regional differences and risk risers and fallers

Climate change (18%) may be a non-mover year-on-year at #7 but is among the top three business risks in countries such as Brazil, Greece, Italy, Turkey, and Mexico. Climate change dropped from fourth to tenth place in Africa and the Middle East compared to the previous year. However, it remains a top-five concern in countries such as Nigeria, Ghana, Mauritius, and Morocco. Physical damage to corporate assets from more frequent and severe extreme weather events are a key threat. The utility, energy and industrial sectors are among the most exposed. In addition, net zero transition risks and liability risks are expected to increase in future as companies invest in new, largely untested low-carbon technologies to transform their business models.

Unsurprisingly, given ongoing conflicts in the Middle East and Ukraine, and tensions between China and the US, Political risks and violence (14%) is up to #8 from #10. The risk moved down to #7 in Nigeria from #2 in 2023. Interestingly, this risk has moved down one place to seventh in Africa and the Middle East, while ranking as one of top five risks in Cameroon and Ivory Coast. 2024 is also a super-election year, where as much as 50% of the world’s population could go to the polls, including in Ghana, Mauritius, Senegal, South Africa, India, Russia, the US, and UK. Dissatisfaction with the potential outcomes, coupled with general economic uncertainty, the high cost of living, and growing disinformation fueled by social media, means societal polarization is expected to increase, triggering more social unrest in many countries.

However, there is some hope among Allianz Risk Barometer respondents that 2024 could see the wild economic ups and down experienced since the Covid-19 shock settle down, resulting in Macroeconomic developments (19%), falling to #5 from #3 and retains #3 position in Nigeria and moved down from #1 to #3 in Africa and the Middle East. It ranks as #1 risk in Cameroon, Ghana, Mauritius, and Nigeria. Yet economic growth outlooks remain subdued – just over 2% globally in 2024, according to Allianz Research.

“But this lackluster growth is a necessary evil: high inflation rates will finally be a thing of the past,” says Ludovic Subran, Chief Economist at Allianz. “This will give central banks some room to maneuver – lower interest rates are likely in the second half of the year. Not a second too late, as stimulus cannot be expected from fiscal policy. A caveat is the considerable number of elections in 2024 and the risk of further upheavals depending on certain outcomes.”

In a global context, the shortage of skilled workforce (12%) is seen as a lower risk than in 2023, dropping from #8 to #10. However, businesses in Central and Eastern Europe, the UK and Australia identify it as a top five business risk. Given there is still record low unemployment in many countries around the globe, companies are looking to fill more jobs than there are people available to fill them. IT or data experts are seen as the most challenging to find, making this issue a critical aspect in the fight against cyber-crime.

Continue Reading
Comments

Company News

Dangote Refinery Raises Diesel Price to N1,100/Litre Due to Naira-Dollar Crash

Published

on

Aliko Dangote - Investors King

Dangote Refinery has announced an increase in the price of Automotive Gas Oil (diesel) from N940 per litre to N1,100 per litre.

This significant adjustment in pricing reflects the refinery’s efforts to mitigate the impact of currency depreciation on its operations.

The decision to raise the price of diesel comes amidst ongoing challenges in the foreign exchange market, with the naira experiencing a downward spiral against the dollar in recent weeks.

The refinery cited the unfavorable exchange rate as the primary driver behind the price hike, signaling the intricacies of operating in a volatile economic environment.

It is worth noting that just a few weeks ago, on April 24, 2024, Dangote Refinery had announced a reduction in the prices of diesel and aviation fuel to N940 per litre and N980 per litre, respectively.

This move was aimed at responding to calls from oil marketers for a reduction in diesel prices, demonstrating the refinery’s willingness to adapt to market dynamics.

However, the recent depreciation of the naira has necessitated a reversal of this downward trend, prompting Dangote Refinery to adjust its pricing strategy accordingly.

Some dealers reported purchasing diesel from the plant at even higher rates, reaching up to N1,200 per litre for those procuring lesser volumes.

Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria, attributed the price increase to the rising exchange rate, as communicated by the refinery.

He emphasized the direct correlation between currency fluctuations and the cost of imported commodities, such as crude oil, which forms the basis for diesel production.

While officials of the refinery have remained tight-lipped on the matter, industry sources and major marketers have corroborated reports of the price adjustment.

Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, echoed similar sentiments, highlighting the adverse impact of the naira’s depreciation on refined product prices.

The recent fluctuations in the naira-dollar exchange rate underscore the challenges facing Nigeria’s economy, with implications for various sectors, including energy and transportation.

Despite initial signs of stability earlier in the year, the naira’s recent depreciation has reignited concerns about inflationary pressures and economic uncertainty.

Continue Reading

Business

Nigeria-Indonesia Trade Surges to $4.7 Billion in 2022, NICCI President Reveals

Published

on

Institute of Chartered Shipbrokers

The trade volume between Nigeria and Indonesia rose to $4.7 billion in 2022, according to Ishmael Balogun, the President of the Nigerian-Indonesian Chamber of Commerce and Industry (NICCI).

This revelation came during a recent press conference convened to announce the upcoming Nigeria-Indonesia Investment and Trade Forum, scheduled to be held in Kano.

Balogun, speaking with enthusiasm, underscored the pivotal role played by NICCI in fostering bilateral trade and investment between the two nations.

“Our vision at NICCI is to promote robust economic ties between Nigeria and Indonesia, positioning Nigeria as the premier investment destination in Africa,” he declared.

Highlighting Nigeria’s burgeoning position as Indonesia’s foremost trading partner on the African continent, Balogun emphasized the mutually beneficial nature of the relationship.

“Nigeria holds the distinction of being Indonesia’s number one trading partner in Africa, a testament to the strength and vitality of our economic cooperation,” he stated.

NICCI’s commitment to nurturing this partnership extends beyond mere rhetoric, as Balogun elucidated the chamber’s proactive approach to facilitating trade engagements.

“We are resolute in our efforts to bolster interactions between Nigeria and Indonesia through various platforms such as trade forums, fairs, and bilateral symposiums,” he affirmed.

The forthcoming Nigeria-Indonesia Investment and Trade Forum, slated to convene in Kano, represents a pivotal opportunity to further deepen economic collaboration.

Themed ‘Indonesia meets Nigeria: An opportunity for expansion of Bilateral Investment and Trade’, the event promises to be a catalyst for enhanced trade relations and investment inflows.

Reflecting on the evolution of the forum, Balogun reminisced about its inaugural edition held in Jakarta, Indonesia, in October 2022, followed by a successful second edition in October 2023.

This year’s edition seeks to broaden the scope by inviting Indonesian companies to explore the vast potential of the Nigerian market.

Balogun expressed gratitude for the collaborative efforts between NICCI and the Indonesian Embassy in Nigeria, under the leadership of Ambassador Dr. Usra Harahap, as well as the Indonesian government’s Ministry of Trade and Foreign Affairs.

Together, they have orchestrated the invitation of 70 Indonesian companies to participate in the upcoming forum, symbolizing a tangible commitment to fostering bilateral trade and investment.

As Nigeria and Indonesia forge ahead in their economic partnership, the surge in trade volumes serves as a testament to the growing synergy between the two nations.

With NICCI spearheading initiatives to bolster economic cooperation, the future holds promising prospects for further expansion and prosperity on both fronts.

Continue Reading

Business

Dry Cleaners Set to Tap into $165 Billion Global Cleaning Industry

Published

on

The Fabric Professionals and Dry Cleaners Association of Nigeria (FPDA) is gearing up to host the “Clean Show Africa 2024” conference.

This conference aims to expose over 25,000 dry cleaners to the vast opportunities present in the global cleaning and hygiene industry, valued at a staggering $165 billion.

Scheduled to take place on May 28–29, 2024, in Lagos, the event is themed “Positioning Africa’s fabric and hygiene industry for excellence.”

It comes at a crucial time when Nigeria’s dry cleaning industry is experiencing steady growth, with projections indicating a 6.4% annual increase over the next decade.

According to Enibikun Adebayo, Chairman of FPDA, Nigeria’s dry cleaning industry was valued at $8.4 million in 2019.

However, this figure is expected to rise significantly, presenting a ripe opportunity for stakeholders to tap into.

Adebayo emphasized the importance of collaboration within the industry to fully leverage its potential.

“A year ago, we launched FPDA of Nigeria. We are also using the platform to educate our members to be better professionals,” stated Adebayo, highlighting the association’s commitment to enhancing professionalism and standards within the sector.

The conference will shine a spotlight on women in the dry cleaning business, recognizing their pivotal role in driving the industry forward. Reports have shown that dry cleaning businesses are often better managed by women, and the event aims to provide them with the necessary support and resources to thrive.

Ruth Okunnuga, Managing Director of Wasche Paint Nigeria, expressed the need to revolutionize Nigeria’s dry cleaning and laundry industry, emphasizing the lack of proper structure and investment.

She stressed the importance of data collection for effective planning and growth within the sector.

Joseph Oru, Managing Director of Zenith Exhibition, highlighted the conference’s objective of engaging the Federal Government to establish training institutions for dry cleaners. Such institutions would play a crucial role in equipping professionals with the skills and knowledge needed to meet global standards.

As Nigeria’s dry cleaning industry prepares to tap into the vast opportunities offered by the global cleaning market, the Clean Show Africa 2024 conference stands as a pivotal platform for collaboration, innovation, and growth within the sector.

With a focus on excellence and professionalism, stakeholders aim to position Nigeria as a key player in the dynamic and lucrative cleaning and hygiene industry.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending