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The 2018 City Risk Index (CRI) recently published by Lloyd’s, warns that Nigeria could lose cumulative $4.42 billion of its GDP to civil conflict, inter-state conflict, terrorism, human pandemic and sovereign default.

The Lloyd’s CRI measures the GDP@Risk of 279 cities around the world from 22 threats in five categories: finance, economics and trade; geopolitics and security; health and humanity; natural catastrophe and climate; and technology and space. The cities in the index are some of the world’s leading cities, which together generate 41 percent of global GDP.
The index shows how much economic output a city would lose annually as a consequence of various rare risk events.

African and Middle Eastern cities can expect to lose more than $61.44 billion to these risks, annually. This is almost two-thirds of the total loss for all threats.

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.

Due to ongoing battle with Boko Haram, Nigeria ranks third for expected GDP loss due to terrorism. A $437 million GDP loss is projected.

Lagos, the second largest city in the Middle East and Africa region, ranks fifth in terms of potential loss to its GDP. It tops the index’s ranking for civil conflict, with an expected loss of $2.07 billion. Also, human pandemic is the fourth costliest risk facing the city, as much as $265 million could be lost.

Other areas of threats are interstate conflict, which could cost the city
$802 million; and sovereign default, $245 million GDP loss.

47 countries across the Middle East and Africa, 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, the report stated.

However, Lloyd’s believes the region has an opportunity to improve the resilience of its cities in a way that older economies cannot. Much of the urban infrastructure in the region is yet to be built, particularly in Africa, which is urbanising faster than any other continent in the world, hence, this affords countries the opportunity to build-in urban resilience at the planning stage, Lloyd’s concluded.