The COVID-19 pandemic, rising digital threats, local weather change and the US China relationship are among the many High 5 Dangers for enterprise in 2021, revealed at this time by Management Dangers (www.ControlRisks.com), the specialist world threat consultancy.
The RiskMap 2021 web site: www.ControlRisks.com/riskmap
Underpinning these dangers, the hazard of lacking the rebound in a 12 months of multi-speed restoration is a high threat for enterprise within the coming 12 months.
“There’s little doubt that companies will proceed to face appreciable disruption from the COVID-19 pandemic, however we imagine that the alternatives are actual and thrilling for a lot of firms in 2021,” feedback Management Dangers CEO, Nick Allan.
All high 5 world dangers are current in Africa however play out in distinctive methods. In some areas the continent presents a optimistic break from the extra unfavorable world tendencies, comparable to within the regional cooperation proven by the continent in its response COVID-19 and the deliberate launch of the African Continental Free Commerce Space (ACFTA).
Total, nonetheless, 2021 shall be a tricky 12 months for a continent that may wrestle to get well from COVID-19 as quick as a lot of the remainder of the world. Regardless of many important alternatives for buyers, the markets they’re investing in shall be ones characterised by important operational and political uncertainty.
The buyers that may obtain success in 2021 are those who perceive that Africa’s post-pandemic panorama shall be tangibly modified from what got here earlier than, presenting completely different challenges and new alternatives.
The worldwide High 5 Dangers for Enterprise in 2020
The High 5 dangers are launched as a part of Management Dangers’ annual RiskMap report, a worldwide threat forecast for enterprise leaders and coverage makers internationally, revealed at this time.
1. A world with lengthy COVID
2021 shall be a 12 months of uneven restoration as vaccine rollouts create a world of haves and have-nots, with pockets of without end COVID on the backside of the pecking order. A lot of Africa, sadly, shall be within the have-not class and corporations will face extended operational uncertainty as localised restrictions are sporadically imposed in response to virus spikes. Africa’s financial restoration may even be extra gradual, as governments with restricted fiscal headroom can not have interaction in sustained stimulus spending and should as an alternative depend on under-developed personal sectors to drive their recoveries.
2. US-China: stabilisation with out normalisation
Whereas 2021 ought to see superficial stabilisation within the US-China relationship, the straining of the worldwide rules-based system seen over the previous few years is not going to go into full reverse. Competitors moderately than cooperation will stay the norm in worldwide relations. On this regard at the very least Africa represents a welcome break from world tendencies, as 1 January will see the launch of ACFTA, and though full implementation of a continental free commerce space shall be sluggish the truth that Africa is transferring in that path when a lot of the world isn’t must be engaging to potential buyers.
3. Go inexperienced or go bust
An inflection level is coming for the connection between companies and local weather change in 2021. No organisation can now afford to not take a stance. The surroundings is a important side in a broader space of the ESG agenda. Though no African nation bar South Africa has made a web zero pledge to this point – with out particular funding, governments don’t view it as a precedence – the continent nonetheless has big renewable power potential. Renewable power tasks related to microgrids make sense in a continent of small inhabitants centres unfold over big areas, and the latest liberalisation of power markets in lots of international locations has opened up a number of alternatives for private-sector buyers. With out authorities backing, nonetheless, investor could ignore these alternatives for the subsidies and help on provide elsewhere.
4. Digital acceleration hits rising threats
The outstanding improve in connectivity throughout Africa – in cell phone penetration, web penetration, social media use and information site visitors flows – has opened up an enormous array of latest alternatives. That is evidenced by the speedy development within the African tech sector over the previous few years. However this connectivity additionally brings dangers. Cyber crime has boomed throughout Africa, from easy scams to classy assaults on important infrastructure. Legal and state actors have additionally engaged in affect operations, spreading misinformation and inflammatory content material that poses reputational dangers to firms in addition to political gamers. Corporations in Africa, similar to the remainder of the world, must stability the drive for technological innovation with safety, integrity and resilience challenges.
5. Lacking the Rebound
The approaching 12 months will see robust GDP development in a number of markets, the roll-out of vaccines and a world hungry to begin dwelling once more. Whereas progress shall be faltering, an uplift is coming – don’t miss the rebound. If 2020 was about survival for a lot of firms, 2021 is the time to give attention to alternative. Underneath the duress of COVID-19 many firms have flexed, not damaged. By means of innovation, speedy know-how adoption and streamlining, they’ve emerged stronger, whereas weaker opponents have fallen. These firms that flip the effectivity positive aspects of 2020 into productiveness positive aspects, proceed to precisely assess tendencies and present flexibility in adapting their operations will profit from the approaching surge in demand.
“Governance, coverage consistency and rule of legislation are important for buyers in Africa and deep-rooted challenges stay throughout the continent on this realm, nonetheless we do see optimistic change throughout the area. Restoration shall be a chance for governments to deal with structural constraints and promote new approaches & applied sciences – the area stays entrance and centre for a lot of of our purchasers. For Management Dangers, Africa sits on the coronary heart of our previous, current, and future – we proceed to speculate and see development throughout the area” explains Tom Griffin, Associate – Africa and Center East, Management Dangers.
Distributed by APO Group on behalf of Management Dangers Group Holdings Ltd.
The RiskMap 2021 web site shall be reside from Monday, 11 January 2021. The world map with international locations’ political and safety threat forecasts shall be obtainable to obtain right here: www.ControlRisks.com/riskmap
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About Management Dangers:
Management Dangers (www.ControlRisks.com) is a specialist world threat consultancy that helps to create safe, compliant, and resilient organisations in an age of ever-changing threat. Working throughout disciplines, applied sciences and geographies, all the things we do is predicated on our perception that taking dangers is crucial to our purchasers’ success. We offer our purchasers with the perception to focus assets and guarantee they’re ready to resolve the problems and crises that happen in any formidable world organisation. We transcend problem-solving and supply the perception and intelligence wanted to grasp alternatives and develop.
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