By Favour Nnabugwu
LLOYD’s, world leading insurer, has warned that Nigeria could lose $437 million, about N157.32 billion, of its Gross Domestic Product, GDP, annually to terrorism, to rank third in the world on forecast GDP loss. Lloyd’s in its 2018 City Risk Index, also stated that some of the most underinsured countries in the world are in Africa and the Middle East.
According to the report, Saudi Arabia has an insurance gap (the amount between an expected loss and what is covered by insurance) of $5 billion; Egypt has a shortfall of $3.2 billion and Nigeria, $2.6 billion. The report noted that Lagos State ranks fifth in the Middle East and Africa region in terms of potential loss to GDP. “Lagos, the largest city in oil-rich Nigeria, faces geopolitical and security threats. Lagos is a coastal city and will most likely be affected adversely by sea level rise caused by climate change. For example, flooding in 2017 caused disruption and economic loss in the Lekki and Victoria Island areas of the city. Rising water levels which could also assist the spread of disease and human pandemic is the fourth-costliest risk, about $265 million, facing the city.”
The Lloyd’s City Risk Index measures the GDP@Risk of 279 cities across the world from 22 threats in five categories of finance, economics and trade; geopolitics and security; health and humanity; natural catastrophe; and climate, technology and space.
The report further stated that 47 countries across Africa and the Middle East, including Nigeria, South Africa and Egypt, are classified as either ‘weak’ or ‘very weak’ in terms of resilience. Of the very weak cities, 19 are in Africa and include all Nigerian locations.
However, Lloyd’s believes the region has an opportunity to improve the resilience of its cities in a way that older economies cannot. It stated that much of the urban infrastructure in this region is yet to be built, particularly in Africa, which is urbanising faster than any other continent in the world, adding that this affords countries the opportunity to build-in urban resilience at the planning stage.