Africa is known for its beautiful natural landscapes, abundant resources and diverse people and cultures – but it is also known for poverty, corruption, inadequate infrastructure and many other challenges. As with everything in life, one’s perspective determines which facet of the continent one sees. One can view only the risks – or one can chose a more positive or balanced outlook and identify the opportunities. After all, it is not just Africa faced with challenges at this time – the entire world is having to cope with tremendous uncertainty.
For a very long time, interested parties have had Africa in their sights, waiting for the right moment to invest in a continent that has so much potential. The 2020s have been flagged as the decade of Africa’s economic transformation, coronavirus pandemic notwithstanding. The continent’s annual GDP growth rate for the past 20 years has been around 4.6%, and African economies were expected to outperform global growth this year, before the pandemic struck.
According to the International Monetary Fund (IMF), the fastest-growing African countries are South Sudan (8.2%), Rwanda (8.1%), Ivory Coast (7.3%), Ethiopia (7.2%) and Senegal (6.8%). Brookings Institution’s annual Foresight Africa report predicts that Senegal, Rwanda, Niger, Uganda and Mozambique will demonstrate the most rapid growth during the next five years.
Effective risk management will play a critical role in the rise and continued development of the continent. Risk management is an enabling tool that informs decision-making; it could influence decisions around the use and prioritisation of valuable resources, including skills and funding. Although many African companies have implemented risk management practices as part of their due diligence for funding and investment purposes or due to international ownership, there is much work to be done to integrate and develop risk management as part of good corporate governance. Risk management should be viewed as a strategic enabler; through increasing awareness and training, it may be possible to empower many African companies in this space.
The newly established Institute of Risk Management South Africa (IRMSA) Regional Africa Committee is passionate about making an impact on the continent and is committed to supporting it with risk management guidance, insights, training, development, shared experiences and thought leadership. IRMSA recently launched its digital strategy in response to Covid-19, making it possible for the entire continent to access all available training and virtual events. This initiative will enable access to information and will encourage individuals and companies across Africa to improve or develop their risk management capabilities.
Thanks to nimble thinking and meticulous planning, this wealth of online resources has been made available to companies across the continent. In the wise words of one of the most inspirational African leaders of all time, Nelson Mandela, “It always seems impossible until it’s done.”
Authored by: Junita van der Colff, Managing Director, Protean Business Solutions
Chairperson, IRMSA Africa Sub-Committee