How good Risk management is improving company performance - Deloitte
The cost-of-living crisis, the erosion of social cohesion, cybercrime and climate change are some of the most prominent risks faced by many businesses; and how these risks are managed will determine their performance. This is one of the key observations from the 10th Deloitte Africa Risk Conference – a platform for leaders to tackle risks faced by their organisations with their peers – which was held recently under the theme: “Risk powers performance for purpose led organisations”.
Greg Rammego, Managing Director at Deloitte Risk Advisory Africa says,
The Deloitte Africa Risk Conference is not only about appreciating the risks we face, and dwelling on the challenges they bring, it is also about recognising the opportunities these challenges present. Through this hindsight we gain insights that allow us the foresight to enable us to better manage risk and identify opportunities.
We are living in a state of continuous and rapid change, from the emergence of new technologies to disruptive global events that are increasing complexity of doing business.
Cybercrime
In a panel discussion on “Cyber security in the age of AI”, delegates discussed how the pace of innovation by cybercriminals is growing at a faster rate than the corresponding cybersecurity measures.
Cybercrime is a USD2 Trillion a year business, which keeps cybercriminals highly motivated and businesses in Africa on the backfoot because there are only roughly 200 000 skilled digital and cybersecurity professionals on the continent and Middle East combined, as opposed to the 2.6 million professionals in Asia as an example. Panel members pointed out that this not only poses a risk for individuals and corporations, but also puts the sovereignty of countries at risk.
South Africa’s greylisting
Panellists discussed South Africa’s recent greylisting by the Financial Action Task Force, indicating that this presents an opportunity for the country to fix its capital flows and anti-money laundering framework by addressing the concerns raised by the task force. Delegates heard how this presents an opportunity to drive growth, the resilience of our own economies as well as ensure localisation.
Energy Transition
Managing the risks and opportunities presented by the Energy Transition came under the spotlight. Panellists noted how this presents Africa with an opportunity to transform its economies from being resource-based to being technology-based. Considering Africa’s young population and a favourable time zone to service the globe, the continent has an opportunity to transform the traditional business model.
Climate change and its associated effects continue to pose a risk, panel members spoke about how, in West Africa; crop failure is becoming more prevalent as well droughts and sporadic flooding in Southern Africa.
Deloitte has argued that the drive towards net Zero presents the continent with opportunities, which start with supplying minerals (platinum, cobalt and rare earth minerals) required in clean energy as well as the manufacture of Electric Vehicles, for example.
The keynote address was by Admassu Tadesse, President and Managing Director at the Eastern and Southern African Trade and Development Bank, and former executive at the Development Bank of Southern Africa. Tadesse noted that while the continent faced challenges, there are still many opportunities in mining, agriculture and energy.
In Tadesse’s address, he stressed that these are very serious opportunities that need to be looked at and that a number of countries are advancing on those opportunities.
Mining, agriculture and energy have long been a primary economic opportunity with not a lot of beneficiations but there’s a new lease on life, and that new lease opens huge opportunities; given that infrastructure has been gradually improving in recent years and in particular, East Africa but also linking all the way to central Africa.
“Our stated objective today [Deloitte Africa Risk Conference] was to generate insights and share knowledge. These conversations can no longer be avoided. Businesses need insights to be able to face the risks and maximise organisational performance without compromising value. As such, our success will lie in making use of that information. How? Through collaboration,” Rammego noted in conclusion.
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