By Sadiq Umar – President Muhammadu Buhari’s rising unpopularity will place the All Progressive Congress (APC) under increasing pressure and without a bounce in the oil price, fiscal and sovereign risks will persist, a report published by Risk Controls Group Holdings has said.
Even as it observed that African nations vying to emerge as the commercial gateway for foreign direct investment, offer opportunities but also unknown threats for business.
Risk Controls, a specialist risk consultancy with over 40 years’ experience in Africa forecast that Nigeria’s prospects of attracting foreign direct investment in 2017 would continue to be weighed down by the economic challenges of low commodity prices.
The firm, in a statement by APO, its accredited news distributor, made available to News Investigators Tuesday, also said that militancy in the Niger Delta would continue at the same pace as 2016.
The report was contained in its annual political and business risk forecast dubbed: “RiskMap 2017.”
“Nigerian prospects will continue to be weighed down by the economic challenges of low commodity prices. Militancy in the Niger delta is expected to continue at the same pace as 2016,” it noted.
The forecast which focused on the West Africa sub-region observed that macro-economic instability fueled by low oil prices and global economic sentiment will continue to be the main driver of business risks across West Africa in 2017.
The report quoted Tom Griffin, Senior Partner for Control Risks West Africa, as saying that, “macro-economic and domestic political changes are driving African nations to re-invent themselves in the hope of becoming Dubai or Singapore style commercial hubs.
“This will present lucrative new opportunities for business, but equally engender unknown risks and require a deeper understanding of the local political and regulatory environment.
“Companies will pursue different strategies to protect value and seize opportunity in 2017. Many organizations will be defined as Arks, Sharks or Whales by their response.
It said the macroeconomic factors, namely: low oil price and global economic sentiment will be the primary driver of instability across the continent.
Adding that, internal political uncertainty across a number of key nations will pose a much greater risk to businesses on the continent than the effect of international geopolitics.
“African businesses will remain vulnerable from failing to accord cyber security risk the same value as more established security or political threats.
“Businesses will respond as Arks (defensive focus on core markets), Sharks (targeting new opportunities) or Whales (becoming too big to fail)
“Better governance has improved the business environment but plain sailing is not assured,” the statement added.
The West Africa outlook reveals that, in Ghana, “key macroeconomic reforms to address concerns over the high level of public debt, and investments in major infrastructure projects to alleviate the long-running energy crisis are expected to be the focus for the new administration, the New Patriotic Party (NPP), led by Nana Akufo-Addo. Anti-corruption will take a central focus including the introduction of legislation to tighten public procurement processes and to increase transparency in investment deals.”
In Gambia and Guinea-Bissau, “economic and institutional reforms vital to attract investment will continue to be frustrated due to significant political instability of a number of incoming governments in smaller countries in the region.”
While in Mali and Burkina Faso, “intensifying rivalry between al-Qaida and Islamic State will put both frontline states once again on the back foot, as they struggle to form an effective response to terrorism in the region.”
However, in Cote d’Ivoire, “a continued focus on economic growth and an investor-friendly regulatory regime will sustain investor confidence and a rise in private investment. But longer term concerns around the stability of the business environment particularly regarding corruption and political succession beyond 2020 will persist.
“For businesses to succeed in this diverse region, it is important to take a threat- led approach and understand the unique and evolving risks that could impact the business in that specific market,” Mr. Griffin added.