et again, the year 2023 retains much of the woes that had plagued the country in the past five years in terms of the risks it faces which some analysts describe as existential if it festers beyond this year without any strong remedial initiatives by the government.
The current year’s Global Risk Report commissioned by the World Economic Forum (WEF) listed 35 risks that were incorporated into its Executive Opinion Survey (EOS). Out of this, 5 top risks were identified for each country surveyed. For Nigeria, 6 were identified because two predatory risks tied on the 5th ranked position. About 12,000 respondents were presented with a basket of 35 risks to select the top 5 that present the greatest threat to their individual countries.
The 18th Edition of WEF’s Insight Report partnered with two of the world’s leading insurance companies, Zurich Insurance Group and Marsh McLennan to publish this year’s report. In the EOS section, measuring the National Risks Perception listed as Nigeria’s top risks the following;
- Terrorist Attacks: Geopolitical risks
- Debt Crises: Economic risk
- Cost-of-living crises: Societal risks
- Severe Commodity supply crises: Environmental risk
- Rapid or sustained inflation: Economic risks
- Employment and livelihood crises: societal risks
Rapid or sustained inflation and employment and livelihood crises are tied to position 5 owing to the number of times respondents pick them as presenting the greatest risks.
“Cost of living crisis dominates global risks in the next two years while climate action failure dominates the next decade. It is also believed that “geopolitical fragmentation will drive geoeconomic warfare and heighten the risk of multi-domain conflicts.”
In the short-term and long-term view of the Survey, environmental risks will be dominant accounting for between 5 to 6 top risks on the scale. Environmental resilience measures will be the number one preparedness metric for countries that may absorb the shock of events to come.
The Survey puts terrorist attacks and cost-of-living crises as the most volatile of the six identified top risks confronting the Nigerian State. Although, it has seemed that Nigeria contained the Covid-!9 outbreak from spreading among the risk-prone population, the aftermath shows worsening economic, environmental, and societal risks on an unimagined scale. Compounding geopolitical risks from terrorism and banditry divert many investable funds that could have cushioned the cost-of-living crises.
“Recent and current events such as COVID-19 and the cost-of-living crisis are steadily eroding economic, educational and health-related gains in a widening proportion of the population, with a growing divergence between advanced and developing countries. This in turn is interacting with a multiplicity of environmental and geopolitical risks – climate change, ecosystem collapse, multi-domain conflicts – to further threaten the security and stability of societies around the world”, the report states.
In context, these form part of the issues that leading contenders in the forthcoming presidential election are pitching for electoral votes. Inflation and severe commodity supply crises comprise other major risks exacerbating livelihood crises.
Resilience and Preparedness
The year 2023 marks another turn of events for the country with the opportunity to choose new leaders. Skyrocketing food prices, the rising fuel cost and the eventual removal of the petrol subsidy present both the investment opportunity and threats. Tradeoffs are expected between investment in human development and short-term cushion to subsidy removal. Invariably, investments in all development indexes will be on the upper scale. The type of resilience to built-up will largely, depend on the government’s aggressive push to build human capital.
Undoubtedly, Nigeria is not alone in these festering risks. Globally, the Cost-of-living crisis, Erosion of social cohesion and societal polarization top the rest in terms of severity in the short term up to 2025. Aside from these two, eight more risks plague the earth’s inhabitants including; Natural disasters and extreme weather events; Geo-economic confrontation; and Failure to mitigate climate change. Large-scale environmental damage incidents; Failure of climate change adaptation; widespread cybercrime and cyber insecurity; Natural resource crises in addition to Large-scale involuntary migration.
However, in 10 years, the Survey sees Large-scale involuntary migration, Erosion of social cohesion and societal polarization emerging as the severest of societal problems and topmost risks to tackle. Identified among the top 10 risks among countries are Failure to mitigate climate change; Failure of climate-change adaptation; Natural disasters and extreme weather events; Biodiversity loss and ecosystem collapse and Natural resource crises.
Driven by technological innovation, widespread cybercrime and cyber insecurity will continue as a top risk. Geoeconomic confrontation as seen in Russia and Ukraine war, contestations in the South-China Sea and other such economic conflicts will continue to present risk issues to the world. Large-scale environmental damage incidents will increase as well.
Biodiversity and ecosystem balance
On the risk of biodiversity loss and ecosystem collapse including natural resources crises, the federal government through the National Agency for Great Green Wall (NAGGW) and the National Biosafety Agency (NBMA) believes efforts so far indicate a balance and improvement in the country’s ecosystem. However, the World Economic Forum’s report states that “defensive, fragmented and crisis-oriented approaches are short-sighted and often perpetuate vicious cycles.”
Aside from the mandates to ensure biosecurity by maintaining “adequate levels of protection in the field of safe transfer, handling, and use of genetically modified organisms” and impacting adversely on “conservation and sustainable use of biodiversity.
The agency lacks sustainable and resilient measures to “prevent, respond to and recover harmful biological substances that may threaten the health of humans, animals, the environment, and the economy.”
The same may be said about the NAGGW and its ambitious programmes without a general framework for achieving the set objectives. However, it can be credited with some positive modest records having established over 506km of shelter belts and 427 hectares of plantations. The agency also claimed to have produced 37,252,179 seedlings of trees. According to the agency, this has been its response to the threats to climate and biodiversity in the country.
Rethinking the country’s risk management framework will foster a coherent national reliance on a time-tested process of measuring, mitigating and possibly transferring some of the identified risks to a national portfolio and the commercial risks market. Thereafter, it will possible to deal head-on with the contagious and cyclical threats of food and fuel crises. Combating terrorism and ensuring the safety of farmlands will encourage farmers to return to their farms and with increased production, acute hunger will begin to abate.
“Lack of preparedness for longer-term risks will destabilize the global risks landscape further, bringing ever tougher trade-offs for policy-makers and business leaders scrambling to address simultaneous crises. A rigorous approach to foresight and preparedness is called for, as we aim to bolster our resilience to longer-term risks and chart a path forward to a more prosperous world,” says the WEF report.