South Africa Significant 12 Risk Scenarios and 7 Opportunities To Optimise – Mitigate Significant South Africa Anticipated Risks in The Next 10 Years

It has been observed by various Scholars and Thought Leaders that one of the variables that inform Strategic Planning is Strategic Assumptions and one of the aspects that Organisations and Countries alike look at when formulating Strategic Assumptions are Anticipated Opportunities, which then informs what Strategies should be adopted to exploit and optimise the Anticipated Opportunities.

When Downside Global Risks, Regional Risks, Country Risks, Industry Risks or even Organisational Level Risks are timely identified and responded to they become a Source of Opportunities for Businesses and Entrepreneurs. Risk Foresights Assist Entrepreneurs and Businesses identify Opportunities to Create Solutions to Optimize Risks. 

In this Article we explore Opportunities that will arise out of the 12 South Africa National Development Plan (NDP) Significant Risk Scenarios Anticipated in the Next 10 Years, Identified by RiskForesights.COM in 2020.

It is Mission Critical that we always anticipate what Threats and Opportunities are lying ahead, which may either prevent or enhance the achievement of our Objectives and ensure our plans and decisions we make are Risk Informed.

The recent Report on Economic Progress Towards The National Development Plan’s Vision 2030 released in December 2020 concluded that the Country is falling short of meeting most of the NDP 2030 Targets and corrective action is required going forward. One of the areas that will need to be strengthened going forward is the Risk Management Processes around the NDP so we can anticipate how the future may look like, and build Risk Resilient Plans.

Below we Outline Anticipated Significant Risk Scenarios in the next 3 to 10 Years that should they materialize will negatively or positively impact the achievement of the NDP’s Key Aims. These Risk Scenarios are a Source of Opportunities and should influence the Decision Making and Planning Process across all Levels of Government including Local Government, SOEs as well as Private Enterprises.

Risk Scenario 1
A second Wave of Political Instability / A Spring Uprising due  to High Youth Unemployment, High Levels on Inequality, Selective Morality of the Media and political infighting within the Ruling Party
Risk Scenario 2
A Commodity Price Shock in the next 5 Years due to a prolonged Global Economic Stagnation further derailing the country’s Economic Recovery. (At the time of writing this article this Risk Scenario has hightened due to Russia invading Ukraine and the all high tensions between Russia and The West including America)
Risk Scenario 3
A Total Collapse of Some Industries and/or a Rise in New Industries due the Impact of COVID – 19 further derailing the country’s Economic Recovery. This is hightened by declining competitiveness and lack of innovation in the Country.
Risk Scenario 4
An Eminent Debt Crisis Due to the Impact of COVID – 19 and Declining Government Revenues which will see more budget allocation towards servicing of  debt and taking money away from Social Development.
Risk Scenario 5
Collapse of the Social Grant System as more and more people rely of Government Grants and Government Revenues Shrink- which will result in more borrowing to fund Social Grants and throw  the poor into deep  poverty.
Risk Scenario 6
Emerging Citizen Activism due to Service Delivery Failures and Citizens realising they can be part of the Solution to create the future we all desire.
Risk Scenario 7
Scarcity of Human Settlements Land and Water in Major Cities due to lack of proactive planning and a growing population
Risk Scenario 8
Digital Divide and Loss of Employment due to New Innovative and Disruptive 4IR Technologies which may result in further Job Losses in the Country
Risk Scenario 9
4IR dominance by China, USA, Japan and Europe with South Africa being reduced to a consumer of 4IR Technologies
Risk Scenario 10
Breakdown of Non – Energy, Ageing Infrastructure (e.g. Sewage and Water Infrastructure) impacting negatively on economic growth initiatives and service delivery.
Risk Scenario 11
Legal System losing Credibility due to real and perceived abuse of the legal system to fight political battles
Risk Scenario 12
Frequent Draughts caused by Global Warming

5 Opportunity Aspects That Arise Out of the NDP Vision 2030 Risk Scenarios Include but not limited to, The Creation of Solutions To Close Institutional Gaps Identified. Below is an Outline of Some of The Opportunities That Need to be Exploited and Optimised by Start-ups in particular as they are more innovative and don’t have the buggage of protected Vested Interests.

1.Creation of a New 4IR Industry by locally owned Start – Ups (e.g. 4IR Digital Applications, FinTechs, InsurTech, RiskTechs etc) to stimulate Economic Growth and Deversify The Economy.

2.Adoption of Green Energy Technologies by locally owned companies to drive Ownership of the Economy by Africans while at the same time reducing Carbon Emissions.

3.Adoption of EduTech to provide equal education opportunities to all citizens regardless of where they reside in the Country and bridge the Digital Divide.

4.Adoption of HealthTech Solutions to make Healthcare Accessible to those who are vulnerable and need it most.

5.Imports Substitution with Goods and Services produced in factories located in Africa to drive Economic Growth, localise Ownership of the Economy and Create much needed Jobs.

6. Urban and Economic Hubs Development of smaller cities such as Newcastle, uMthatha, Rusturnburg, Kimberly, Polokwane, Witbank, Qwaqwa.

7. Public and Private Sector Partnerships in Economic and Infrastructure Development still remain as relevant as they were 10 Years Ago to Drive Economic Development and Transformation.

Africa and the World at Large need Visionary Risk Management Leaders who have the ability to anticipate the future and have a clear understanding that the future is shaped by what we do today to mitigate and / or exploit Threats and Opportunities lying ahead. First let me define what I mean by a “Risk Management Leader.” By this, I mean someone or anyone, who is in charge of making a business or a country grow and achieve its Vision. This could be a CEO, President, Sales Director, CFO, Chief Risk Officer, COO, Engineer, Doctor, Economist, Director General, Minister, Mayor, City Manager, Receptionist or even administration staff. Regardless of what your title is,  you are a Risk Management Leader and have a unique challenge ahead of you to anticipate and shape our Future. As a Risk Management Leader you have to be different and go against the grain to avoid blending into the crowd. Don’t fall into the trap of confusing Crisis Management with Risk Management and following an elitist approach in Risk Identification and Assessment.

If you have ever looked up the word ‘Education’ in the dictionary, you may have found that besides Enlightenment, it can also mean Indoctrination. A Classic Example of Indoctrination are those that say a Risk Management Leader is a Person with the Tittle Chief Risk Officer / Adviser, Head of Risk, Risk Officer, Risk Champion or whatever the Risk Tittle may be.

Many Transformational Leaders also believe Indoctrination is what our current education model is more aligned to as it teaches us What to Think and not How To Think. It is a system that often keeps us shackled to the past — living by the rules of past generations that have no effect on what we want our future to look like. And often, it accidentally suppresses our creativity and ingenuity as human beings.

One of the Catastrophic Risk Management Weaknesses we have ever seen as a Country, is Failure to Timely Identify, Escalate and Mitigate Risks. As an example, what the West considers as Risks in their respective countries, is typically already a reality in most Developing Countries including South Africa. In most cases a reality that has reached Crisis levels requiring Radical Recovery Strategies.

I will argue that Managing Risks is inherent to Human Beings as well as in the Animal Kingdom, it is as old as Human Kind and an Integral Part of our lives. Managing Risks effectively is about the ability to timely anticipate both threats and opportunities lying ahead that may either prevent or enhance the achievement of our Vision, Plans to Achieve our Vision and taking pro – active actions to mitigate the Risks identified. It is interesting to note that George Bush (Junior), Barak Obama and Bill Gates anticipated a Pandemic like COVID – 19 but nothing was proactively done to Mitigate The Risk. The Greater Part of the World only reacted when the Risk had materialised and had become a Crisis.

Risk Management Failures are prevalent in most Public and Private Organisations, largely as a result of a weakness we have, which is the Chronic Shortage of Skills in Risk Management. This is evident when you see “Leading Risk Management” Professionals in the Country classifying existing and / or deepening of Current Weaknesses and Threats as Risks (most of which have already reached Crisis Proportions in the context of South Africa) (e.g. Lack of Visionary and Ethical Leadership that the Country has experienced, Widespread Governance and Project Failures, Entrenched Fraud and Corruption, Deepening Structural Inequalities that pre dates 1994, South Africa is rated as the most unequal country in the World, Skills Shortages, Electricity Shortages since the 1st Load shedding in 2007 , High Levels of Unemployment, with Youth Unemployment that has averaged over 52% since 1994. all these realities pre date 1994) which One Business Leader once described as Checking Your Rear-view Mirror to see what is Infront of your Car.

The lack of Skills in Risk Management is also seen, when only Threats are recognised as Risks in most leading Companies and Opportunities Lying Ahead are excluded when Assessing Risks. In Worst Case Scenarios you see some “Risk Professionals” when Identifying Risks they simply make an Objective a Negative. (e.g. Failure to Root Out Deeply Entrenched Corruption, which is an negative of the Country’s Objective to Root Out Corruption).

It is in this respect that RiskForesights.COM created The RiskForesights.COM SITUATION ANALYSIS DIAMOND™ to present a Balanced View and forward looking Risk Outlook, PESTLE and SWOT Analysis Report. It is either we change how we play the Game or play a totally new Game going forward. We have developed The RiskForesights.COM SITUATION ANALYSIS DIAMOND™ not only to provide a holistic 360o view of the Current Situation and Anticipated Future Situation, but also to make sure there is no duplication of Strategies to either Mitigate Risks and/or resolve Weaknesses that largely pre date 1994. This is partly due to PESTLE & SWOT Analysis being done separately from a Risk Analysis as well as the Results of a SWOT Analysis being duplicated as Risks.

To help the Country make Risk Informed Decisions, Inform the Development of National Development Plan (NDP) and Achieve our desired Future Aspirations, by anticipating both Threats and Opportunities lying ahead, we present our 1st Issue Africa Risk Insights Radar. This Risk Radar explores in detail Risks that will either derail and/or enhance the achievement of the National Development Plan Aspirations and/or Objectives, should they materialise.

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