- Cybersecurity, corruption, and policy shifts have been cited among the top issues that Kenyan businesses will have to confront in 2024.
- In 2022, Kenya suffered a loss of at least $153 million to cybercrime, which is projected to rise by 14 per cent annually.
- A new report ranks Kenya as the second most difficult country for businesses in EAC after South Sudan.
Cybersecurity, corruption, and policy shifts have been cited among the top issues Kenyan businesses will have to confront in 2024. The latest Risk Barometer by underwriting giant Allianz, reveals that in Kenya’s complex and dynamic business environment, several challenges loom, casting shadows on the entrepreneurial spirit that drives the economy.
The high cost of living directly impacts consumer spending, affecting businesses across sectors. A weakening currency coupled with inflation also threatens businesses and the economy.
According to Allianz Commercial CEO Petros Papanikolaou, the key challenges for companies globally include digitalization, climate change, and an unpredictable geopolitical environment.
Alarming resurgence of ransomware attacks
Papanikolaou noted that the real-world impacts of these risks are already evident, with extreme weather events, ransomware attacks, and regional conflicts anticipated to test the resilience of supply chains and business models further in 2024.
The Allianz Risk Barometer revealed that data breaches are the most concerning cyber threat (59 per cent), followed by attacks on critical infrastructure and physical assets (53 per cent). The report notes that the alarming resurgence of ransomware attacks last year saw insurance claims rise by over 50 per cent in 2023 compared to 2022.
The increasing use of technologies like generative artificial intelligence (AI) by cybercriminals to automate and intensify attacks poses a significant threat. Factors such as poor cybersecurity in mobile devices, a shortage of cyber professionals, and the vulnerability of smaller companies relying on IT outsourcing are expected to drive cyber activity in 2024.
“Cyber criminals are exploring ways to use new technologies such as generative artificial intelligence (AI) to automate and accelerate attacks, creating more effective malware and phishing.” Said Petros Papanikolaou, in the findings
Kenyan businesses facing increased risk of Cybercrime
In 2022, Kenya suffered a loss of at least $153 million to cybercrime, which is projected to rise by 14 per cent annually. The country faces a severe deficit of cybersecurity expertise, with less than 2,000 experts compared to the needed 40,000 to 50,000.
Globally, cyber incidents top the list of risks for the third consecutive year, with a clear margin of 5 per cent points. This is echoed in 17 countries and regions, including Kenya, Africa, the Middle East, Nigeria, Uganda, Mauritius, Germany, India, Japan, the UK, and the USA.
In Kenya, the second-highest risk identified is theft, fraud, and corruption, climbing from the fifth position in the previous year. Corruption remains a significant challenge, draining at least $3.69 billion or 7.8 percent of the GDP, per the Ethics and Anti-Corruption Commission. The country ranked 123rd out of 180 countries in the 2023 Corruption Perception Index.
Despite partially easing post-pandemic supply chain disruptions, business interruption remains the second biggest global threat in 2024. Kenya moved from #6 to #5, reflecting interconnectedness in the volatile global business environment.
Read Also: Three Kenyan startups win Cyber Security Hackathon
Natural catastrophes a new risk in Africa
Natural catastrophes (26 per cent) rose three places in the global survey, becoming the sixth-largest risk. Natural catastrophes emerged as a new risk in Africa and the Middle East, notably in Morocco, where it climbed first. Cameroon and South Africa also experienced increased natural catastrophe risks, ranking among the top five risks in these countries.
The findings follow a report released by East African Business in November last year that ranked Kenya the second most difficult country for businesses in EAC after South Sudan.
Council, highlighting concerns about the nation’s business.
The report shows that Kenya received a moderately low index score of 3.43, placing it sixth out of the seven partner states surveyed. South Sudan was ranked seventh with a slightly higher index score of 3.5.
