In Nigeria, we often wait for disaster before reacting. Whether it was the 2009 banking crisis, the fuel subsidy removal debacle, or the naira’s recent freefall, we have cultivated a culture of managing risk only when it has already materialised. The real danger lies not in the events themselves but in how consistently we ignore the early warning signs.
As a finance and risk professional with experience advising trustees and financial institutions on risk-driven strategies, I have seen firsthand how organisations, and indeed entire sectors, treat risk management as a compliance chore rather than a strategic compass. This limited view is hurting our capacity for sustainable growth and institutional resilience.
Let’s start with the most telling example: the 2009 banking crisis. At its core, it was not just a failure of capital adequacy or loan performance. It was a failure of foresight. Banks had been over-leveraged and overexposed to non-performing assets, especially in oil and gas. There were clear red flags: unhealthy insider lending practices, bloated balance sheets, and excessive reliance on short-term funding but the system only kicked into gear when the house was already on fire. By then, the central bank’s intervention had become a rescue operation instead of a proactive safeguard.
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Fast forward to the recent foreign exchange (FX) reforms. While market liberalisation is laudable, the sudden floatation of the naira caught businesses and even institutional investors unprepared. The shock led to massive losses, especially among small and medium-sized enterprises (SMEs) that lacked the hedging tools or scenario planning to withstand the impact. Many imported goods doubled in price overnight. A proper enterprise risk strategy, even at the SME level, could have made a difference but how many small business owners even have access to basic risk management advisory?
This is not just a private sector issue. Government decisions often follow the same pattern. Look at the fuel subsidy removal. While economically justified, the timing, communication, and lack of mitigation planning amplified the social cost. Instead of cushioning the transition, we left millions to absorb the full brunt without a safety net. That is not just poor policy implementation; it is a risk oversight.
“While economically justified, the timing, communication, and lack of mitigation planning amplified the social cost.”
So why do we keep missing the signs?
First, risk professionals are rarely part of strategic conversations. In many boardrooms, risk is relegated to audit committees and only called upon when the numbers start looking bad. But risk is not about reacting to bad news, it is about anticipating the headlines before they are written.
Second, there is insufficient investment in data. We make billion-naira decisions with little more than spreadsheets, gut feelings, or outdated models. Yet globally, risk leaders are using predictive analytics, stress testing, and macroeconomic simulations to guide both policy and strategy.
Third, the regulatory ecosystem itself is often politicised. Independence is crucial in risk governance. When oversight bodies are influenced by political calculations rather than risk data, the consequences are inevitable: delayed decisions, patchwork interventions, and prolonged crises.
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Let’s make this a little more relatable. For instance, a trader in Alaba who buys electronics using dollars but sells them in naira. If the naira takes a nosedive and he is not ready for it, his profits can disappear just like that. Now, think about how this plays out on a bigger scale with a national budget or a pension fund. That is why we need to make risk awareness a priority, not just in banks and financial institutions, but in every industry and at every level of government.
The way forward is clear. We must reposition risk management as a value-adding partner in decision-making. This means moving from reactive firefighting to proactive fireproofing. It means integrating risk intelligence into strategy, operations, and policy design.
Risk professionals need to reframe their role: from gatekeepers to enablers. Instead of always saying “no”, we should be asking, “What if?” and “How can we do this more sustainably?” Likewise, organisations must elevate risk leadership beyond compliance. Let risk data influence business expansion, market entry, capital allocation, and government reform.
Nigeria does not lack the talent or the tools. What we lack is the mindset. Until we treat risk management not as an afterthought but as a strategic imperative, we will continue repeating the same costly mistakes.
We must do better — because next time, the cost may be even higher.
Abayomi Fashina (Fash): Tax and Risk Professional | BSc, MSc, AAT, ACA
