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Global specialist in risk consultancy, Control Risks Group Holdings Ltd, has averred that African markets will become increasingly attractive in 2020 to both the good and the ugly.
Whereas more new investors will shift emphasis to African markets, there are strong indications that deadly cyber attacks may hit several businesses with weak digital security frameworks next year.
Already, fractious geopolitics in a US election year, a rising tide of global activism and a new level of cyber warfare are among the Top five risks for African business in come next year.
In his remarks after release of the Report, Control Risks CEO, Nick Allan points out that “Populism, activism, protectionism, sanctions and political disruption remain the canvas onto which business tries to build global markets and supply chains. It has not been easy in 2019 and it’s going to get harder next year”.
While this outlook is prompting businesses to rethink their global strategies and footprint, across Africa, the continent’s traditional development partners – the EU, China and the US – are facing increasing competition on the ground from new players, such as Russia, the Gulf states and Turkey.
Greater regional integration, through the African Continental Free Trade Area and regional blocs like the East African Community, is a welcome counterbalance to growing economic nationalism elsewhere in the world. For African governments and foreign investors able to navigate an increasingly complex and competitive landscape, opportunities are opening up.
Also speaking, Barnaby Fletcher, Associate Director at Control Risks averred that “The standard narrative of US-China rivalry in Africa always looked like an over-simplification, but is certainly outdated now. China’s engagement with Africa is undergoing a fundamental shift, the US is playing catch-up, and other countries are seeking to expand their influence in an increasingly multipolar landscape.
“Geopolitical objectives are being supported by a flood of development finance, creating both opportunity and competition for private-sector players,” added Fletcher.
Business Hilights gathered that the Top 5 risks are released as part of Control Risks’ annual RiskMap report, a global risk forecast for business leaders and policy makers across the world.
The top five risks in business for 2020 in Africa and other parts of the world are as follows;
Geopolitics and the US campaign trail
The US election campaign will have a palpable impact on geopolitics in 2020. The drama of the campaign trail combined with the disruption of the impeachment process will reverberate through America’s global actions, with the White House using stunt diplomacy to try to distract from impeachment. At the same time US allies and adversaries such as North Korea, Iran or even the Islamic State will hedge against the most ideological election in 40 years and try to add pressure to an already heated electoral campaign. Such posturing will heavily influence the geopolitical risk landscape for business in 2020.
The activist society passes judgement
Across the world, social pressures and coordinated activism around issues like environmental protection, political and human rights, inequality and privacy are demanding more and more from businesses, not just governments. In the street, in shareholder meetings and in your company, the activist society will bang ever harder on the boardroom table in 2020. Being ethical is no longer enough. Being compliant is no longer enough. This uncodified morass of social, moral and political accountability will consume business leadership in 2020 and beyond.
Cyber warfare hits a new level
Cyber threats in 2020 will align as never before to provoke a high impact, cyber-enabled assault on critical infrastructure. Western deterrence has failed to stem the tide and hostile actors are using ever harder methods. The US will retaliate in ways that show the world it cares. In theatres of strategic conflict, such as the Gulf, unpalatable military measures will give way to cyber-attacks. And so will begin a new cycle of escalation: the west’s cyber-capable rivals and their proxies will raise their game, with unpredictable consequences. If leading companies are attaining credible cyber resilience, national infrastructures across the globe are not and present the main vulnerability in the international cyber conflict.
Economic anxiety meets political fragility
Even the most optimistic forecasts say global economic growth in 2020 will be dismally low or, as our partners at Oxford Economics put it, “grinding.” This, before any account of an economic shock that could shake an uneasy global economy. If global GDP takes a turn for the worse, we cannot expect a fragmented world to craft a coordinated policy response. Governments facing polarisation domestically and bilateral opportunism internationally will find it difficult to rally in the face of economic hardship. The challenge will be particularly difficult for commodity-dependent economies in the Middle East which have not fully recovered from the oil price crash in 2015 or which are grappling with sanctions, youth unemployment and social unrest.
Leaders without strategies
At the helm of some of the world’s most important countries is a crop of leaders who can’t see further than the next crisis. For them, tactics will trump strategy. 2020 is shaping up to be a year when the brakes on incident escalation are absent. This is a world where resilience at the state level is weak, and long-term solutions take too much time to find. Whether it’s a global trade war, a cyber attack or a regional border skirmish, things could escalate faster in the absence of any international oversight. Business will need a strategy for an intensely tactical world.
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