South Africa has been receiving some poor international press coverage of late, and the 2019 Institute of Risk Management South Africa (IRMSA) Risk Report might have some insight into how this could affect the country moving forward.

The report assesses the current state of the nation and makes predictions based on how socio-political and economic circumstances in the present could impact SA in the future.

According to BusinessTech, the report highlights the 10 biggest possible risks facing South Africa in the years to come.

Let’s unpack them:

1. High Rates Of Unemployment

The country’s unemployment rate increased to 27,6% in the first quarter of 2019.

What that means is that roughly 6,2 million South Africans between the ages of 15 and 64 currently don’t have the means to support themselves or their families.

The burden of unemployment is concentrated among the youth between the age of 15 and 34 years.

Almost four in every 10 young people in the labour force do not have a job, noted Christopher Palm, chief risk advisor at Institute of Risk Management South Africa.

Where there’s unemployment, there’s income disparity.

2. Income Disparity

A new tool by the Southern Africa Labour and Development Research Unit (SALDRU) lets you punch in your monthly income, and then compares your pay to the rest of the country.

It turns out that if you’re earning as little as R7 313 a month and aren’t supporting anyone else, you’re officially part of the richest 10% in South Africa.

Trevor Channing, head of governance and risk at the Chemical Industries Education and Training Authority (CHIETA), is of the view that South Africa’s second biggest risk – growing income disparity and inequality – will threaten the majority of the six priorities in the NDP.

“It will have a direct impact on our social cohesion, strengthening our democracy, citizenry and functioning as a capable and developmental state,” said Palm.

Class division on this level has a tendency to create unrest.

3. Failure Of Governance In The Public Sector

Christopher Palm, chief risk advisor at Institute of Risk Management South Africa, said the following:

“The country now needs ethical political leadership for sustainable foreign investments, and an end to wasteful expenditure for resources to be applied in ways that will stimulate economic growth. The country needs all sectors of society to create a united front against the national issues that are holding us back.”

Truth.

4. Fraud and Corruption

The EFF, ANC and DA all made campaign promises to end corruption in South Africa.

The impact of fraud and corruption and State failure has shifted down the risk-list. It is now in the fourth place, noted Palm. In 2017 it was top of the list, and last year it was the second biggest risk facing the country.

“This reflects the ending of the Zuma-era; a decade that will be blight on the nation for some time to come. Last year saw the beginnings of a collective resolve to reverse the damage,” Palm said.

Let’s hope that resolve is sustained.

5. Sub-Standard Education And Skills Development

It’s almost impossible to find employment without a tertiary degree these days – even more so because primary and secondary education standards are so low.

6. Energy Price Shock

One word – Eskom.

7. Labour Unrest And Strike Action

In the IRMSA report, VoxCroft Analytics specifically expressed concern that the growing disillusionment among the youth of South Africa could lead to a youth-driven protest movement, on a much larger scale than the student protest movement.

Such a movement, if led and supported by other population groups in the country, would hold a particular challenge for the general political stability of the country.

8. Political Instability

This has a lot to do with infighting, nepotism, and politicians more concerned about their own well-being than that of the country.

9. Cyber-Attacks

Remember that time North Korean cybercriminals targeted South Africa to raise money for nuclear weapons?

We clearly need to up our cybersecurity game.

10. Macro-Economic Developments

These are economic developments that will impact the country over time. Palm, again:

“Difficult decisions were made, such as raising the VAT rate with one percentage points, replacing the boards of key state-owned enterprises, dropping the nuclear deal and tackling the land issue.”

IRMSA pointed out that South Africa has a robust economy and currency – relative, at least, to our peer group which include countries such as Turkey, Argentina, Thailand, Indonesia, Mexico, Egypt and Nigeria. “It has a stronger government than we have had for years.

That’s good to know.

The potential risks and their predicted outcomes aren’t set in stone.

We’ll have to see how it all plays out over the next few years.

[source:businesstech]