1. Risk and Reward:
Will the Evolving Security Threats to West Africa Ever Affect Energy
Investment in the Region?
George Kobani

2. Risk Management:
Maintaining an appropriate balance between risk
and reward

3. Threats
• Piracy
• Militancy / activism
• Terrorism
• Industrial scale oil theft
• Disenfranchised Communities

4. Reality Stats Vs. Perception
Shipping activity vs. Piracy correlation

5. Piracy in West Africa
2014 (Jan-June)2013
49Attacks
63
Kidnaps
3
Fatalities
116 Attacks
134
Kidnaps
20
Fatalities

6. Impacts of Insecurity
• Higher costs (compensation
premiums, security, etc.)
• Weak investor confidence
• Short termism
• Weak capital investment
• Siege mentality
• Less local engagement

7. Terrorism:
Northern Nigeria’s Boko Haram
• Boko haram and its splinter group
Ansaru have a fluctuating connections
AQIM and al Shabaab.
• Boko Haram’s activities can have
destabilizing effects in Northern
neighbours Chad, Cameroon and Niger
• Boko Haram’s activates have
particularly stifled investment in
infrastructure, power and telecoms
and business in Northern Nigeria
• Boko Haram’s activities and support
base will be limited in Southern,
Christian regions and coastal areas

8. High Risk Areas (HRA) Nigeria
HRA 1: Central Niger delta
Bayelsa / Delta States
HRA 2: Eastern Niger delta
Akwa Ibom/ Cross Rover States

9. Rewards
• According to the report, Africa’s share of global FDI projects reached 5.7 percent in
2013, the highest level recorded in the past 10 years. The number of new FDI projects in
sub-Saharan Africa (SSA) increased by 4.7 percent, with the average size of FDI projects
increasing from $60.1 million in 2012 to $70.1 million in 2013.
• Growing insurgency in Nigeria and Kenya notwithstanding, Ernst & Young regarded
them as one of the “emerging hotspots for investment”. Other countries are Zambia,
Mozambique, Tanzania, Uganda and Ghana. South Africa remained the number one go-
to place for investment in Africa.
• The African growth story is built on “strong macroeconomic growth and outlook,
improving business environment, rising consumer class, abundant natural resources,
democratic dividend and infrastructure development,” the report indicated.
• Africa has started diversifying economic activities, with oil-rich countries like Nigeria
looking at other opportunities like Agriculture, thereby growing employment levels and
creating a new consumer class.

10. Effective Strategy Execution
• Purpose
• Planning
• Perspective
• Portfolio
• Partnership
• People
• Patience

11. Planning
• Determining security costs and budgeting
through risk analysis and risk vs. cost
• Transfer options: Service providers In-house-
Consultants
• Assessment of resource pooling, selecting
security services vendors and managing
• Insurance premiums: Community engagements,
risk insurance,
• Security departments: From cost centre to
business contributor and enablers

12. West African champions
• UPS, Coca Cola, Airtel, MTN, GE, Tullow, Total

13. What can really go Wrong?
• Failure of democracy
• Separating policy& politics
• Civil War / Sustained Ethnic Conflict
• Drastic change in government regulation / onerous business
climate
– Guinea Bissau
– Niger delta
– Liberia, Sierra Leone
• Organized crime networks

14. The best security is
Economic opportunity