The World Economic Forum (WEF) in its Global Risks Report 2024, has identified that Kenya is facing 5 key risks threatening social and economic stability.
In its report, WEF identified economic downturn and public debt as pressing risks that need to be addressed by President William Ruto’s administration.
Other risks identified included; unemployment, inflation and food supply shortage.
On the economic downturn, the report indicated that combined with societal polarisation, it was creating a recipe of numerous risks.
“Economic uncertainty will weigh heavily across most markets, but capital will be the costliest for the most vulnerable countries,” the report indicated.
Additionally, WEF explained that climate-vulnerable countries like Kenya stand to be increasingly locked out of much-needed digital and physical infrastructure, trade and green investments and related economic opportunities.
Public debt was seen as a direct consequence of the economic downturn for Kenya and other vulnerable countries.
‘An already visible economic downturn is likely to spread, with a risk that new economic shocks would be unmanageable in such fragility and debt passes the tipping point of sustainability,” the report read in part.
Other countries burdened by public debt included; Argentina, Bahrain, Bangladesh, Brazil, Ghana and Greece.
Despite President Ruto’s efforts to reduce unemployment by exporting labour capital, WEF reckoned that the country’s economic stability was hindered by the rising number of jobless citizens.
In its global outlook, WEF noted that small and medium-sized companies, that form the backbone of many domestic markets, will be particularly sensitive to slowing economic growth and persistently high interest rates.
“As struggling companies cut costs, unemployment may rise, reducing consumer spending and creating a negative feedback loop that can contribute to a deeper economic downturn,” the report indicated.
Additionally, it was noted that living standards could recede for populations suffering entrenched unemployment and economic distress, radically reshaping political dynamics.
On inflation, the rising cost of living amidst elevated inflation and high interest rates continued to create economic uncertainty not only in Kenya but rest of the world.
Lastly, Kenya was seen as facing a food supply shortage largely due to disrupted supply chains.
Kenya and other developing nations in Africa were seen to be bearing the brunt of conflict and tensions in Europe and the larger Global North.
“Dissatisfaction with the continued political, military and economic dominance of the Global North is growing, particularly as states in the Global South bear the brunt of a changing climate, the aftereffects of pandemic-era crises and geo-economic rifts between major powers,” the report stated.
