Goli Innocent An independent international organisation, the World Economic Forum (WEF) on Monday identified the top five risks that Nigeria could face in 2024.
In its latest 2024 Global Risk Report, The international organisation listed economic downturn, energy supply shortage, unemployment, public debt and inflation as the five risks for Africa’s biggest economy.
The report surveyed over 11,000 business leaders in 113 economies to know the risks that pose the most severe threat to each country over the next two years.
“The cost-of-living crisis remains a major concern in the outlook for 2024. The economic risks of inflation and economic downturn are also notable new entrants to the top 10 risk rankings over the two years,” it said.
It added that although a “softer landing” appears to be prevailing for now, the near-term outlook remains highly uncertain.
Last year for consumers in Nigeria has been challenging as a result of the cash scarcity, removal of the petrol subsidy and naira devaluation.
In November, there was a constant increase in the general inflation rate for the eleventh consecutive month. The rate has remained in double digits since 2016. This has affected the operations of numerous enterprises, reduced the purchasing power of financially strapped Nigerians, and increased household disposable income.
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The NBS reports that headline inflation reached an 18-year high of 28.2 per cent in November after reaching 27.33 per cent in October.
In 2023, rising inflation in Nigeria, the most populous country in Africa, would force 14 million more people into poverty, according to the World Bank’s most recent Nigeria Development Update study.
This means that the number of poor people rose to 104 million from 89.8 million at the start of the year
The latest Nigeria Labour Force Survey shows the unemployment rate rose from 4.1 per cent in the first quarter of 2023. It stood at 5.3 per cent in the fourth quarter of last year.
Data from the Manufacturers Association of Nigeria showed that the number of jobs lost in the manufacturing sector rose by 108.7 per cent to 3,567 in the first half of this year, the highest in three years from 1,709 in the same period of 2022.
The number of jobs created in the sector declined by 32.8 per cent to 6,428 from 9,559 in H1 2022.
“If interest rates remain relatively high for longer, small- and medium-sized enterprises and heavily indebted countries will be particularly exposed to debt distress,” authors of the WEF report said.
They noted that economic uncertainty will weigh heavily across most markets, but capital will be the costliest for the most vulnerable countries.
“The convergence of technological advances and geopolitical dynamics will likely create a new set of winners and losers across advanced and developing economies alike.
“If commercial incentives and geopolitical imperatives, rather than public interest, remain the primary drivers of the development of artificial intelligence and other frontier technologies, the digital gap between high- and low-income countries will drive a stark disparity in the distribution of related benefits and risks,” the report said.
According to the WEF, the most vulnerable nations and communities would be further left behind, cut off digitally from the rapid advancements in AI that have an impact on the financial sector, education, healthcare, and the environment in addition to creating jobs in related fields.
