Africa Shows Budding Shoots of Promise Despite Myriad Risks, According to Willis’s Resilience Magazine
London, UK, October 1, 2013 – In contrast to the usual cycle of war, disease and famine,
Sub-Saharan Africa shows the budding shoots of promise, according to experts in the third issue of
Resilience magazine, the risk management publication from Willis Group Holdings (NYSE: WSH), the global risk adviser,
insurance and reinsurance broker.
“The people of Africa are demanding a better quality of life, embracing technology and understanding the power
of the vote, pushing their leaders to deliver more. As a consequence peace reigns in most
countries, those attending school is at record highs, HIV has fallen by three quarters, life expectancy
has risen by a tenth in the past decade and foreign direct investment has tripled,” according
to William White, Executive Director in Willis International.
The engines for growth are expected to be the expansion of agricultural production, robust growth in services
and a rise in oil production and mining. At the same time, insurance has a key
role to play in facilitating the development of these sectors, according to Willis. “Insurance brings risk
assessment, discipline and knowledge. And by de-risking, insurance enables investments to be made that may not
otherwise have been feasible,” said Julian Roberts, Executive Director of agri-business at Willis. “Crop insurance has
a great deal to offer and will have a much greater role to play in Africa
in the future.”
High commodity prices in recent years have driven economic growth in many African countries. Others stand to
join them: Mozambique and Tanzania are set to become major exporters of natural gas; Guinea and
Sierra Leone could become huge iron ore exporters. Although interest has cooled in the past 12
months as commodity prices have reduced, long-term prospects are good, said Andrew Wheeler, Mining Practice Group
leader at Willis. “Africa has world-class deposits in minerals that are increasingly becoming scarce elsewhere, or
that only exist in the region,” he added.
To take part in Africa’s growth story, foreign companies must assess and mitigate myriad risks. Political risk
remains a primary concern for businesses in Africa. As democracy has put down deeper roots, coups
and civil war have become less frequent. But ethnic, religious and socio-economic rifts still give rise
to terrorism and political violence.
Some people in Africa have interpreted the return of companies as a form of “neocolonialism”, according to
Tim Holt, Head of Intelligence for Alert:24, a risk and crisis management consultancy from Willis Special
Contingency Risks. “Chinese companies and investment, for example, have flowed into parts of Africa, and while
they were initially welcomed with open arms, we now see some resentment. Countries are happy for
the investment but there are always suspicions that foreign companies will want to come in, take
the resources out, and leave environmental damage behind.”
A sample of other articles from this issue of Resilience includes:
Europe’s defining moment: With the Eurozone in crisis and political uncertainty spreading, those companies that are the
most ambitious and entrepreneurial in their approach to risk management will be the winners, according to
Jorge Luzzi, president of the Federation of European Risk Management Associations (FERMA).
Terrorism Cover: Risk
managers must understand different risk pools’ triggers and definitions of terrorism to identify their gaps in
cover. “Several of the world’s long-established terrorism insurance schemes were set up to deal with a
different terrorism threat than is predominant today,” said James Borrie, Executive Director in Willis’s Terrorism and
Political Violence Practice.
Fraud in a downturn: Companies must improve their internal processes and work
cultures as fraud grows more rife and complex. “Fraud is not confined to any one particular
business sector: organisations in the private sector, government bodies or those working in the third sector
all have to contend with fraud on a daily basis. Unless they proactively seek to understand
and mitigate the risk it poses, they could suffer financially,” said Leslie Wright, Executive Director in
Willis’s Financial and Executive Risks Practice.
To err is human: Employers should regularly monitor
their employees’ behaviour before incidents turn to serious accidents. “A firm may be extremely vigilant about
implementing safety rules to prevent accidents but, over time, despite all its best efforts, employees may
start to apply the rules less strictly,” said Eric Joost, Chief Operating Officer of Willis North
America and Chief Executive Officer of North America Specialties at Willis.
Antarctic exploration: The
Willis Resilience Expedition is an ambitious undertaking by 19 year old Parker Liautaud who will trek
397 miles (640km) in freezing temperatures for 22 days and attempt to break the world record
for skiing to the South Pole.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. With
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