The Work Risk Review has released their latest Counrty Risk Report, this time focusing on Nigeria.
The report outlines a number of risks affecting the area, including a bungling of the country’s oil subsidy policy and increased terrorism, which “undermine the countries potential for inward investment.”
With the recent attacks that left 200 dead in Kano coming swiftly on the back of civil strikes at the removal of oil subsidies, World Risk Review raised Nigeria’s ratings against Strikes, Riots & Civil Commotion, and Terrorism.
Against the backdrop of an already weak financial infrastructure and spiralling Islamic insurgency, investors, says the report, should be aware of the political implications of further public backlash at the government’s lack of action on economic reform and institutional corruption.
Elizabeth Stephens, Head of Credit and Political Risk Analysis for JLT, said that a key concern is President Goodluck Jonathan’s ability and commitment to achieving control over the escalating tensions.
The withdrawal of an oil subsidy, which effectively doubled the price of petrol, led to politically and economically debilitating protests in early January. Though Jonathan has taken steps over recent weeks to reinstate a degree of control, including the partial reinstatement of the subsidy, the sacking of his head of police and an investigation into corruption within the oil sector, the full extent and real impact of his apparent determination remains to be seen.
Stephens said, “Whether Jonathan has the ability and will to harness the pro-reform momentum generated by the recent protests to implement the desired changes is uncertain. It is too early to tell whether initiatives aimed at tackling corruption reflect a genuine government commitment to tackling vested interests and revitalising the oil sector, or if they’re merely a device to ease current pressure.
“But if history’s a guide to the present, the prospects for reform are grim. Jonathan lacks a broad base of political support and the rising tide of terrorism from Boko Haram and other fundamentalist organisations will undermine his ability to position himself as the legitimate leader of the country.”
Support from an already disenfranchised and mobilised population will be difficult to achieve, she concluded, and there’s a chance that unless the planned reforms provide tangible benefits quickly, Jonathan may find himself swept away on a tide of civil unrest.