Kenya, East Africa CEOs among most optimistic in the world

Kenyan and East African CEOs are among the most optimistic in the world, according to a global survey, with the majority more confident in their countries’ economic growth than their peers worldwide.

Approximately 60% of regional business leaders polled in PricewaterhouseCoopers’ 26th Annual Global CEO Survey expect economic growth to improve.

This contrasts with their global counterparts, who predict a decline in economic growth in their countries while only 25% see it improving.

The region’s optimism stems from strong economic growth in 2021 and sustained public spending on flagship infrastructure projects.

This comes amid global shocks caused by Russia’s invasion of Ukraine, which have impacted the US and Europe significantly, resulting in higher fuel and commodity prices, higher labor costs, and soaring inflation.

“The optimism presented by CEOs in the region is a testament to the efforts being made to recover and mitigate expected and unexpected headwinds, alongside confidence in opportunities for growth into the future,” PwC Eastern Africa regional senior partner Peter Ngahu said.

The survey polled 4,410 CEOs in 105 countries between October and November 2022 out of which 138 CEOs from East Africa participated.

It comes after Kenya last year saw the prices of super, diesel and kerosene hit record highs mainly due to supply chain disruptions caused by the Russia-Ukraine war, increasing debt levels and depreciating shilling.

The aggressive hike in interest rates in response to inflation in some emerging markets and developing economies has been projected to edge some countries toward global recession in 2023 and cause a string of financial crises.

Kenyan business leaders are optimistic about government spending following a revision of the total budget for the current fiscal year, which was raised by Sh67.72 billion to Sh3.61 trillion.

However, business leaders see inflation as the most serious threat to their profitability.

Other top executives’ concerns include macroeconomic volatility, cyber risk, climate change, and geopolitical conflict.

According to the Central Bank of Kenya (CBK) CEO’s survey 2023, released in February, 93 percent of the country’s chief executive officers are concerned about global inflation, while 87 percent see high energy prices as a barrier to their expansion plans.

According to the PwC survey, more than a third of CEOs believe that the employee resignation rate in their companies will not change in the next 12 months, while 71% plan to retain their workforce.

Approximately 82 percent intend to maintain employee compensation.

“Global CEOs are more worried about being exposed to macroeconomic volatility including GDP, economic cycle and unemployment in the next five years while East Africa CEOs worry about inflation in both short and medium term,” Ngahu added.

Approximately 66 percent of the CEOs polled intend to reduce operating costs in the coming year in order to mitigate potential economic challenges, while 52 percent intend to diversify product or service offerings and 44 percent will seek alternative suppliers for their businesses.