NEWS INDEPTH: Executives Reveal Biggest Risks to Business in Kenya

This article and its headline are taken directly from the source cited

By Nasibo Kabale

First published November 13, 2018

Unemployment or underemployment ranks as the biggest risk to business in Kenya today, a new survey among executives revealed, turning the spotlight on the country’s training programmes and job skill gaps.

Although the Kenya National Bureau of Statistics (KNBS) in March this year claimed that the country’s unemployment rate declined steadily over the past 10 years to stand at 7.4 per cent at the end of 2016, placing the country among those with the lowest unemployment rates-- business leaders think otherwise and warn than joblessness poses a big threat to the economy.

The concern by the business CEOs in Kenya mirrors that of their counterparts globally and in the sub-Saharan Africa (SSA) region interviewed by the World Economic Forum.

“Of the 34 countries in sub-Saharan Africa that we surveyed, unemployment and underemployment was identified as the most pressing concern for businesses in 22 of them. No other region recorded anything like this level of consensus among respondents, highlighting the profound challenges that the region faces on this issue, particularly in light of the demographic changes that lie ahead” the forum said in a new report for 2018.

The UN projects that the working-age population of Africa will more than double to 1.6 billion by 2050-- a trend that could open new economic opportunities for the continent, but only if jobs can be created in huge quantities.

According to World Bank data, Africa’s official unemployment rate is just 7.3 per cent. However, this figure masks deep-seated problems. More than 70 per cent of the region’s workers are in vulnerable employment – compared to a global average of 46 per cent – and 37 per cent are in extreme working poverty, which is defined by the International Labour Organisation(ILO) as income of less than $1.90 per day.

Executives in Kenya listed terrorist attacks the second biggest threat to business. Terror remains a threat in Kenya although the country has taken major strides to limit it, including deploying its troops in neighbouring Somalia where the Al-Qaeda linked Al-Shabaab militant group remains active. Kenyan troops are battling Al-Shabaab in Somalia as part of an African Union (AU) peacekeeping force that has been deployed there for more than a decade.

The Kenya-based wing of Al-Shabaab, known as Al-Hijra, was in July this year added to the US list of groups it regards as terrorist organisations.

Cyber-attacks were ranked the third highest concern among business executives in Kenya—reflecting a trend globally where businesses have become wary of the huge disruptions caused by such acts. Kenya’s relatively high internet connectivity, with a penetration of more than 80 per cent, as well as high internet traffic from mobile devices has made it a target of cyber-attacks.

A number of massive cyber-attacks took place in 2017 — notably WannaCry, Petya and NotPetya – causing extensive operational disruption and financial losses for organisations around the world.

Failure of regional and global governance was ranked the fourth biggest business risk by executives in Kenya. Kenya has over the years borne the brunt of failed governance in several neighbouring nations such as South Sudan and Somalia which led to an inflow of refugees escaping violence back at home. Apart from putting strain on resources in Kenya, conflict in these countries have been blamed for the inflow of illegal firearms into Kenya resulting in increased insecurity.

The country’s systematic food crises was tiered as the fifth biggest threat to business in Kenya-- highlighting the continuing challenge of meeting basic needs against a backdrop of, among other things, drought, rising food prices, poor planning and the strains of rapid urbanisation.

Only last year, Kenya suffered a massive shortage of maize due to a prolonged drought that affected farming in key producing areas forcing the country to make huge and costly imports to cover for the shortfall...continue reading

Source: Business Daily Africa


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