Kenyan chief executives less optimistic about 2024 growth

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Kenyan CEOs are less optimistic about the growth outlook for 2024, a new report shows. PHOTO | SHUTTERSTOCK

Kenyan Chief Executive Officers (CEO) are less optimistic about the growth outlook for 2024, a new report shows.

The PwC East Africa CEO survey, which sampled views from 231 executives, says they are cautious about global economic growth, with 26 percent saying growth will improve in the next 12 months down from 33 per cent in 2023's survey.

"In East Africa, CEOs are cautious about global economic growth prospects. The cautious stance taken by East African CEOs is also reflected in the economic growth forecasts produced by global institutions," the survey reads in part.

Company and business executives raised concerns about inflation, macroeconomic volatility, cyber risk and geopolitical conflict being at the top of their minds.

"This is attributed mainly to the lagging effects of high food and energy prices, domestic factors such as strong fiscal dominance, agricultural supply shocks, low industrialisation, and imported inflation due to weakening local currencies," read the survey in part.

Kenya CEO's outlook on a slowed growth rate is in line with the Organisation for Economic Co-operation and Development (OECD) forecast that global economic growth will slow to 2.7 percent in 2024.

Most CEOs surveyed in the region remain apprehensive about rising inflation with 42 percent saying it is a concern compared to 49 percent last year.

The weak shilling and the high inflation have led to increased cost of production of goods, a major pain point for companies.

Increasing the Central Bank of Kenya's benchmark rate has made borrowing more expensive as banks used the rate as a base on which to price their loans taking into account a customer's risk profile.

The regulatory environment was cited as a factor inhibiting value creation among other challenges such as limited financial resources and the shortage of skills.

"Notably, 45 percent of respondents identified the regulatory environment as a significant obstacle, indicating the potential impact of compliance requirements on operational flexibility," the report read in part.

According to the report, 35 percent of executives listed financial constraint as one of the inhibiting factors to business growth.

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Note: The results are not exact but very close to the actual.