In 2000, the United Nations Millennium Development Goals (MDGs) laid out development targets to be met in Africa within the first fifteen years of the 21st century. In 2002, the New Partnership for Africa’s Development (NEPAD) adopted by African Heads of State and Governments emphasised the message of the MDGs and provided a road map for developing African countries in the 21st century.To date, Africa’s progress towards the MDGs, NEPAD and other internationally agreed development targets remains off track and despite the recent overall improvement in the rate economic growth, in the policy environment and in macroeconomic fundamentals, the continent’s economic development remains subjected to uncertainty.
Considering that risk is ‘uncertainty of result’, to make certain that African and international commitments as well as the continent’s economic growth are converted into positive results for the average African, the risks that make Africa’s development uncertain must therefore understood and properly managed.
This is the reason why the African Risk Governance Institute was established.
Risk governance is closely related to risk management. But the use of the term governance makes it imperative to treat risks that impact the society, the economy, the environment and health and safety through policy-making.
Policy-making can be highly contentious and difficult due to multiple viewpoints and to gaps in the available information -“known unknowns” and “unknown unknowns”- which characterize policy issues. Risk governance offers a framework for the management of this state of uncertainty as it provides a holistic approach to risk identification, assessment, evaluation, management and communication. It revolves around the production, interpretation and use of knowledge for policymaking.
Risks Impacting Africa’s development
The uncertainty of Africa’s economic development is caused by risks that include but are not limited to climate change, environmental degradation and natural disasters, geopolitical instability and the continuing threat of conflict, food and freshwater security, inequitable distribution of wealth, low mobilization of savings, foreign currency and commodity dependency, poor infrastructure, regulatory risks, corruption, poor education, poverty and inadequate healthcare systems.
These risks are not confined to national borders and cannot be managed through the actions of a single sector or country. They derive from economic, social and technological developments and from natural events which, to a degree, are aggravated by human action. They are systemic because they affect several sectors in the society, the economy and the environment.
These risks are compounded by poor policy decisions, by wrong priorities and orientations of some development initiatives and by political action or inaction, both at the domestic and the international as well as by poor governance and knowledge deficit in trade negotiations for example.
The decelerating world economy and the global financial crisis not only add to the risks that African countries face now and in the future but also and more importantly it justifies the need for risk governance capabilities in Africa.