Sub-Saharan African economies, including Kenya, face increased risks of higher inflation, weaker job creation and rising energy costs over the next year as geopolitical tensions in the Middle East continue to disrupt global markets, the World Economic Forum has warned.
A new WEF report said uncertainty surrounding the Strait of Hormuz, one of the world’s most important oil transit routes, could trigger renewed inflationary pressures at a time when many African economies are still recovering from previous shocks.
Kenya has already seen inflation accelerate, with annual inflation rising to 6.7% in May from 5.6% in April, driven largely by higher fuel prices linked to the Middle East crisis.
The WEF survey of chief economists showed widespread concern over the global outlook, with nearly nine in 10 respondents expecting economic growth to weaken over the next 12 months. About 94% anticipate higher inflation, mainly due to rising energy and food costs.
While only 13% of economists expect a global recession, the findings point to a period of slower growth, increased uncertainty and greater pressure on households and businesses.
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For sub-Saharan Africa, the risks are particularly pronounced. About 36% of economists surveyed expect a significant rise in energy prices across the region, while 61% forecast weak or very weak employment growth over the coming year.
Higher oil prices could increase transport and production costs, raise food prices and place further pressure on consumers in countries heavily dependent on imported fuel.
“The longer the disruption lasts, the heavier the long-term cost for those who can least afford it,” said Saadia Zahidi, managing director of the World Economic Forum.
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Kenya, which imports all of its petroleum requirements, remains vulnerable to prolonged volatility in global energy markets. Fuel is a major cost factor for transport, manufacturing, agriculture and electricity generation.
Although the government has introduced fuel stabilisation measures, economists warn that sustained increases in international crude prices could eventually filter through to consumers and businesses.
Many African countries also face additional constraints, including high debt levels, currency pressures and limited fiscal space, reducing their ability to provide large-scale support to households and companies.
The WEF said economists viewed the current disruption around the Strait of Hormuz as potentially more damaging than the tariff-related trade tensions that affected global markets in 2025.
A prolonged disruption lasting into the second half of the year could have economic consequences approaching the scale of supply shocks experienced during the Covid-19 pandemic, some economists warned.
The report also highlighted concerns over employment, with weak job growth expectations raising fears over youth unemployment in Africa, where millions of young people enter the labour market each year.
Despite the risks, economists expect global demand for African commodities to remain relatively stable. However, slower growth in major trading partners, higher borrowing costs and market uncertainty could weigh on exports and investment.
Financial markets are also expected to experience increased volatility, with nearly 80% of economists predicting greater instability in private debt markets over the next year.
Artificial intelligence was identified as one of the few positive areas in the outlook, with 92% of economists expecting AI adoption to accelerate.
However, expectations for rapid productivity gains have become more cautious, with sectors such as construction, healthcare, utilities and engineering expected to take longer to see significant benefits compared with technology and education.
