Professional Services Firms, KPMG has identified the twin evil of Covid-19 and the ongoing crude oil price war as the biggest risk factors that will threaten businesses in Nigeria for 2020/2021.
In its biennial Risk Management survey report (‘the report’) titled “Top 10 Business Risks in Nigeria for 2020/202, KPMG also identified regulatory, fiscal & monetary policy and foreign exchange volatility risks as some of the highest concerns for Nigerian Executives across industries.
“Prior to COVID-19, the highest concerns for Nigerian Executives across industries are the regulatory, fiscal & monetary policy, and foreign exchange volatility risks, which maintain their place at the 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,” said Tomi Adepoju, Risk Consulting Partner at KPMG, while analyzing the report.
According to him, the report, which is based on aggregate perspectives of 108 executives including Managing Directors, Chief Financial Officers, Chief Risk Officers, Chief Audit Executives and Chief Compliance Officers cutting across various sectors of the economy, also noted that the balance of demand and supply conditions, the US presidential elections and BREXIT will also be a risk factor.
Also taking a look at the report, Olumide Olayinka, Partner and Head, Risk Consulting Services, KPMG Nigeria, explained that since the outlook of the Nigerian economy will rely on possible eventualities surrounding several global issues such as the COVID-19 and the ongoing crude oil price war, businesses should 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.”
While, referring all organisations 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, Olumide disclosed that 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.
In the report, 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 the respondents’ aggregate risk score from our 2018/19 report.”
To view or download the report online, click on https://bit.ly/2JB77fx.