By Henry Uche, [email protected], 08032741427
Economies around the world have been urged to incorporate risk management strategies in both public and corporate planning in a bid to mitigate risks.
According to them, every organization needs a sound risk management strategy as a key enabler for business growth, continuity, resilience and expansion- regardless of national or global economic headwinds.
The aggregate success of businesses in the country is to an extent a guarantee for a nation’s economic overall growth and development. However, there are arguments that no economy survives on a ‘reactive style/approach’ to issues of national importance, especially issues relating to risk and hazard management in a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment.
In Nigeria, hardly would one see a risk and hazard manager/professional in Ministries, Departments, Agencies of government as well as in many corporate organizations. This is evident in our reactive response to issues such as flooding, fire outbreak and other hazardous incidents that have claimed not only lives and properties but set us backward with huge cost and damage.
A critical look at the Nigerian economic situation today shows that political leaders and resource controllers (alike) do not factor in, the place of risk management in their decisions, plans, policies, programs and general governance practices. Many a time; insurance experts have implored political leaders either elected, selected or appointed to engage insurers/ underwriters, risk managers and hazard handlers and professionals, particularly when preparing budgets, allocating resources and prosecution of projects which included; fixing roads, bridge construction and other infrastructure, but sadly, what we observe are unwholesome and rascal decisions and profligacy which have plunged more Nigerians into abject poverty.
Commenting on the significance of risk management to the economy, the immediate past Vice President of Risk Managers Society of Nigeria (RIMSON), Mr. Joseph Obah, said the raging wars in different parts of the world are not only avoidable but needlessly disruptive, plunging innocent citizens and other inhabitants into unsettling existential crisis in an already VUCA environment, thus, throwing up risk management challenges on corporate and political leaders including Nigerians, hence the need to incorporate and engage risk managers in our daily living.
According to him, VUCA is, indeed, a new risk response impetus towards the deployment of mitigants against a pervading global chaos, holding down and stifling businesses and livelihoods including Nigeria and Nigerians. “The ability to mitigate and stem these crippling situations will remain the hallmark of positive leadership, good governance and the emergence of a new order. And I dare say, a recipe for rising above the global governance-deficit-dilemma that has continued to threaten and emasculate global peace.
“Asides politically incorrect governance in many parts of the world, many big business concerns, including financial institutions such as banks, have in recent years collapsed as a result of breaches of the dictates of Enterprise Risk. Management.
“A very good and closest example is the Silicon Valley Bank collapse of March 10, 2023, with lots of media buzz around it. ‘The bottom line to these stories is risk management failure’ and, of course, the failure of business managers (including political leaders) to heed to red flags in their business environment.”
Obah added that political instability, systemic corruption, tribal/ethnic bigotry, economic stagnation, multi- dimensional poverty, terrorism, banditry, senseless killings and military coups are some of Africa’s challenges which has set the region million miles backward coupled with outright sit-tight dictatorships not excluding flagrant abuse of the Rule- of-Law by current leaders.
“As a risk management body, RIMSON has continued to intensify its advocacy for the integration of risk management ideals into governance processes in Nigeria in order to stem the tidal challenges militating against national growth and development. No doubt, the embrace of risk management culture and ideals by government officials, especially when this takes root in their governance processes, would seamlessly translate to the deployment of risk management tools in the policy making processes of all arms of government, including budgeting and appropriation, borrowings and debt management, resource allocation and management.
Moreover, a risk-based solutions to the myriad of challenges bedeviling poorly governed nations like Nigeria today, are bound to make the necessary difference as well as guarantee greater resilience in the face of daunting challenges.
He affirmed that Risk managers posses immense knowledge on risk management tools to mitigate unwholesome governance practices which regularly impede national growth and development. RIMSON’s resolve in promoting partnership and collaboration with government agencies and parastatals towards entrenching risk management ideals in their governance processes remains unshaken.
“Today more than ever, disruptive practices such as impunity, abuse of positions of responsibility, favouritism and ethnic bigotry must be challenged through superior thought-leadership, geared at promoting international best practices and good corporate governance. Government institutions such the National Orientation Agency, must brace up with deliberate and intentional political education and reform initiative for the promotion of positive systemic reforms,” he charged.