One of the leading big four Professional Services Firms in Nigeria (KPMG) has released its biennial Risk Management survey report (‘the report’) titled “Top 10 Business Risks in Nigeria for 2020/2021.” The report is based on aggregate perspectives of 108 executives including Managing Directors, Chief Financial Officers, Chief Risk Officers, Chief Audit Executives and Chief Compliance Officers cut across various sectors of the economy.
The report offers a holistic look at key risks that executives believe will impact organisations in Nigeria, in the coming year and highlights the impact of the coronavirus pandemic on the country’s macro-economic outlook and risks prioritised by the survey respondents.
Tomi Adepoju, Risk Consulting Partner, said in her statement that “31 risks were assessed by C-Suite Officers, 5 of which were rated high, 25 as medium and 1 as low. The risk assessment had an aggregate score of 3.17, which depicts a “Medium Risk” environment for Nigerian Businesses in 2020, based on our rating methodology. This represents an upward shift in respondents’ aggregate risk score from our 2018/19 report.”
She noted that “prior to COVID-19, the highest concerns for Nigerian executives across industries were the regulatory, fiscal & monetary policy, and foreign exchange volatility risks, which maintain their place at top 3 from our 2018 ranking. However, one cannot help but acknowledge the COVID-19 and its impact on Nigerian corporates and the global business climate at large.”
In 2020/2021, the outlook of the Nigerian economy will rely on possible eventualities surrounding several global issues such as the COVID-19, the ongoing crude oil price war, the balance of demand and supply conditions, the US presidential elections, and BREXIT.
Olumide Olayinka, partner and head, Risk Consulting Services, KPMG Nigeria, stated that “considering recent happenings, we urge businesses to develop and implement a robust enterprise risk management framework that covers business continuity and disaster recovery planning, and businesses that have a framework in place should seek periodic independent assurance on its effectiveness.”
All organisations are encouraged to refer to KPMG’s weekly business impact series on COVID-19 for more information on topical issues arising from the pandemic and suggestions on how to manage them.