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Inflation, weaker currencies and climate change top list of concerns for African economies

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Financial risks, including currency depreciation and inflation are some of the key concerns for African economies.

That’s according to a new survey of the continent’s leading insurance professionals, conducted by the pan-African reinsurer, Continental Reinsurance.

The survey found that depreciation and inflation are impacting business results and fueling fears of dampened growth over the next twelve months. The need to adapt current business models to climate change was the second most pressing issue.

The survey’s respondents also identified Nigeria, South Africa and Zimbabwe as the three countries most at risk from these threats.

After a two-year Covid-induced hiatus Continental Re used its 7th CEO Summit in October 2022 with 70 captains of industry in attendance, to discover what they see as the biggest challenges and opportunities for the sector and Africa’s economies alike in the year ahead.

Launched in 2014 and hosted by a different African country each year to reflect the pan-African footprint of the company, this year’s CEO Summit took place in Marrakesh, Morocco.

“The only certainty of 2022 appears to be uncertainty. From the challenges of a changing climate to the war in Ukraine, food security and energy cost increases, African economies are facing new risks and threats to their status quo.

Events like our CEO Summit enable business leaders to share ideas and solutions that can help mitigate some of the risks that lie ahead,” noted Lawrence Nazare, Group CEO of Continental Reinsurance Plc.
Over 90 percent of the CEOs surveyed warned that their perception of these risks has increased in the past 12 months – compared to 63 percent who believe opportunities are growing.

Only 3 percent believed that threats were diminishing, a reflection that CEOs are increasingly worried about business prospects in the year ahead.

In terms of opportunities, the CEOs felt that the insurance markets do have an opportunity to broaden consumer understanding of the benefits of insurance and to develop products that were better suited to customer demands, both cited by 21 percent of the CEOs as silver linings for the sector over the next 12 months.

“For every risk there’s a business opportunity. The insurance industry, which is often referred to as a mirror to the economy, is well versed in risk assessment, and given its role as oil in the economic engine a reliable gauge of things to come, ” explained Nazare.

Overall, 63 percent of the CEOs surveyed felt that there is still an opportunity to grow the business in 2023 and they identified Kenya, Botswana, Ghana, and Rwanda as the countries in which the greatest opportunities lie.

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