Kenyan and East African chief executives are among the most optimistic industry leaders in the world after a global survey found that a majority are more confident of economic growth in their countries than their peers across the world.
About 60 percent of business leaders in the region surveyed in the audit firm PricewaterhouseCoopers' 26th Annual Global CEO expect an improvement in economic growth.
This is in contrast to their global counterparts representing 65 percent who expect a decline in economic growth in their countries against 25 percent who see it improving.
The region’s optimism is driven by strong economic growth recorded in the region in 2021 and sustained public spending on flagship infrastructure projects.
This comes amid global shocks caused by Russia’s invasion of Ukraine that hit the US and Europe majorly resulting in rising fuel and commodity prices, increasing labour 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.
The Kenyan corporate leaders pin their optimism on government spending amid a revision of the total budget for the current year which was raised by Sh67.72 billion to Sh3.61 trillion.
Business leaders however see inflation as the top threat that could hinder their profitability.
Other concerns among the top executives include macroeconomic volatility, cyber risk, climate change and geopolitical conflict.
The Central Bank of Kenya (CBK) CEO’s survey 2023 released in February also showed 93 percent of chief executive officers in the country are troubled by global inflation while 87 percent of them have expressed concerns about high energy prices as an obstruction to their expansion plans.
Over a third of the CEOs in the PwC survey believe that the employee resignation rate will not change in their companies in the next 12 months, while 71 percent plan to retain their workforce.
About 82 percent plan to maintain the compensation for their employees.
“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.
About 66 percent of the CEOs surveyed are making an effort to reduce operating costs in the next year in order to mitigate against potential economic challenges while 52 percent are looking at diversifying product or service offerings while 44 percent will be finding alternative suppliers for their businesses.