CEOs’ expectations for better deals this year after a rough 2017

NAIROBI, KENYA: As 2018 beckons, it promises to turn around the fortunes for Kenya’s corporate sector whose chief executives are happy to leave 2017 behind. Here are opinions of the captains of the corner office.

Telkom Kenya CEO Aldo Mareuse

With respect to the industry, the dominance and interoperability debate are still high on the sector’s agenda.

Failure by the Kenyan market to adopt best practices and implement measures that will address its skewed nature, could in effect hurt the growth of the same market and have negative disruptive results on the industry as a whole.

All players need to operate in a conducive environment and a level playing field. It is in circumstances such as these that strong regulatory frameworks and interventions must be put in place to regulate the market back to healthy competition, failing which, consumers and market players like ourselves will not benefit.

Since the change of our consumer-facing brand and the unveiling of new products to the market, Telkom’s brand awareness continues to grow. We now have a mobile subscriber base that is fast approaching four million and we are seeing increased usage of our data offerings.

We have also made significant investment on our infrastructure to improve on service quality as well as touch points to improve on accessibility.

We are now working on a 360 degree customer approach to improve their overall experience on our network into the new year. We are also carrying out internal trials on our mobile financial services solution and will be ready to launch to the public thereafter.

Safaricom CEO Bob Collymore

Kenya has emerged from one of its most challenging years yet.

Against the backdrop of multiple elections, business leaders also had to contend with significant shifts in customer behaviour, a depressed economy, and the impact of disruptive global trends on their business.

In 2018, the focus for many business leaders will be how to identify new revenue streams and profitability to restore lost ground from 2017.

At Safaricom, we will continue with our heavy investment in our network and ensuring that we deliver the best customer experience and innovative communications services in the region. We will do this alongside our continued push to create more sustainable solutions that can enable more access to essential services via technology.

Jibran Qureishi, Stanbic Bank Regional Economist, East Africa

2017 was indeed a challenging year one that tested the resilience of the banking sector. In addition to the interest rate cap, the drought and prolonged electioneering weighed down economic activity.

With the economic growth outlook looking more promising, the demand side for credit could improve although IFRS 9 combined with the interest rate cap could still lead to a decline in credit extension to borrowers perceived to be more risky.

For long-term investments to trickle in, investors would need some comfort on political stability in Kenya. For this to happen, we can’t have a slowdown in investment spending every five years owing to the political cycle.

KCB CEO Joshua Oigara

The general outlook for 2018 is favourable with an expected improvement in economic conditions and a pickup in investments across the East African region. We are optimistic and looking forward to a more dynamic year in 2018 across East Africa.

2017 was a relatively tough year with a prolonged election period and with that behind us now, we expect an uptick in economic activity in the next 12 months.

Two things will define the financial services sector in the coming year — a new regulatory environment and increased investments in the financial technology (Fintech) space. The global financial system is getting into a new regime — the IFRS9 — which will take effect in January 1, 2018.

Under the IFRS 9, the most fundamental change is recognition of credit risk losses. However we do not anticipate a shrinkage in credit or any major shock to our business as this is something we have over the years been preparing for and making the necessary adjustments.

KCB is adequately capitalised to fit in under the new guidelines.

Ronald Ndegwa, Savannah Cement Managing Director

The year 2018 promises to be a promising year for players in the building and construction sector. We have seen good recovery in the last quarter of 2017 which underpins our corporate optimism.

The government’s focus on the big four development agenda particularly on the manufacturing sector is already giving us confidence that the year 2018 will act as a Launchpad for accelerated mid-term growth.

Already incentives such as the 50 per cent power tariffs slash for night term production are providing us with the necessary impetus to anticipate growth.

At Savannah Cement, we welcome the tariff reduction among other incentives as it will reduce cost of production and make us more competitive in East Africa region moving forward.

We are already exploring capacity enhancement programmes to enable us meet forecasted growth and demand.

We are also excited at the development pace on a key project such as the Standard Gauge Railway (SGR) Second phase to which we are supplying quality cement products. In the first SGR Phase, Savannah Cement products were used for concrete works on the Makindu-Kambu section, Emali Section and at the Nairobi Terminus (Syokimau Station) architectural masterpiece.

In the second phase, Savannah Cement products will also be used at several construction points including the Embulbul Tunnel which is a first of a kind civil engineering masterpiece in sub-Sahara Africa.

Mugo Kibati, Group CEO, Sanlam Kenya

2017 has been a momentous year for Sanlam Kenya. We have managed to make good progress on our efforts to integrate and unify all our businesses under one brand to afford our clients convenience in solutions and services.

We also managed to undertake changes on our distribution model for the life business and even added a feather in our cap by retaining exceptional human capital to accelerate our growth.

Looking ahead, the year 2018 for Sanlam Kenya provides a good platform for business growth. We are in the midst of our corporate strategy rollout and with it a good opportunity to consolidate the gains we have achieved this far following our recent rebranding exercise.

That said, we shall be expending significant energy and resources in market and demand creation efforts for our range of non-bank financial services.

Among other efforts, this will involve financial literacy efforts as part of our commitment to nurture a savings culture in this market. The year 2018, will also see us moving to our new home at the Sanlam Tower, along Waiyaki Way.

Dr Anastasia Nyalita, Chairperson Kenya Association of Pharmaceutical Industry (KAPI)

The local pharmaceutical industry is looking forward to a bright 2018 with an opportunity to expand our contribution to national good.

The government’s focus on Universal health coverage is a welcome development that will help scale up effective access to healthcare services including quality pharmaceutical products.

At KAPI, we are committing to play a key role in advancing and supporting the government commitments through the stringent application of our code of practice and technical partnerships.

Dan Githua, Group CEO Tuskys

The year 2017 has been quite rough for the retail sector with many ups and downs. The resilience of the formal retail sector has been severally tested.

However, I am optimistic that 2018 will provide a rebirth moment for the sector with bright prospects ahead.

Going by the positive performance already registered this festive season, we are looking forward to even better performance through the year fuelled by renewed economic confidence and reduced political uncertainty.

Patrick Tumbo, CEO, Jubilee Insurance

For most of 2017, the business environment was a bit difficult and the insurance industry found it challenging too. This can be attributed to the slowdown in our economy due to the 2017 general elections and the political uncertainty brought about by the polls.

Fraud was also a major concern in the sector, especially in the medical and motor classes’. This was mainly perpetrated through alteration of documents, concealing pre-existing medical conditions, falsified claims and identity theft.

Looking ahead into 2018, I am optimistic about the prospects the New Year will bring. We would like to see more Kenyans taking up medical cover and it is for this reason that we have been advocating for doctors to encourage the use of branded generic drugs so as to tame the rising cost of healthcare.

The prescription of branded generic drugs will drastically reduce the cost of healthcare and health insurance will become more affordable and accessible.

Richard Hechle MD, Internet Solutions Kenya

The impact of campaigns and elections in 2017 saw halted investment on any new ICT initiatives that were related to growth and expansion by our clients.

In some cases, there was a reduction as funds were redirected to more critical business functions by many businesses to stay afloat. If the economic down turn is anything to go by, I foresee the industry coming up with ways of keeping and increasing market share through lower costs and more innovative services aimed at adding value to what clients are already paying.

When you look at trends that are likely to drive the ICT sector in 2018; I see a lot of businesses adopting cloud as the primary location of their ICT systems - picking from the trend this year to secure data before and during the elections.

The effect of this will be a shift in budget from purchasing or renting hardware and software to acquisition to the development of human skills to match the demand from ICT.

Sundeep Raichura, CEO Zamara

2017 has been a challenging year for Kenya. The early part of the year saw the drought which apart from its devastating impact also brought home the lack of sufficient forward planning to tackle such crisis.

The latter half of the year saw the prolonged election cycle with the wasted valuable time and preoccupation with politics at the expense of the economy and sadly, a political debate devoid of policies to deliver a better future for Kenyans. That notwithstanding, the fact the country is still stable and economic indicators holding is a testimony to the resilience of the Kenyan people and economy.

I believe 2018 brings a lot of promise – even as the Government looks at the priority areas outlined by the President in his inauguration.

I would like to see the Government give attention to policies to revive and give new momentum to the economy.

This ought to include a review of the interest rate capping legislation, managing the rising debt burden and implementing legislation to boost the level of saving and capital in the country. Kenyans can easily do the rest.

Margaret Mbaka, Managing Director Dalbit Petroleum

At Dalbit Petroleum, we are looking forward to a productive 2018; fuelling regional growth. The year promises to be a good one with renewed economic confidence in the local and regional markets.

The anticipated political stability and improved economic policies in the region point to a business-friendly environment that will facilitate growth.

Having recently made significant investments in our infrastructure, we are looking forward to a more efficient operation in all our markets from Kenya, Tanzania, DRC, South Sudan and Zambia.

Simon Kimutai, Chairman Matatu Owners Association

This year (2017) has been the worst. I have been in transport for close to 30 years and have not experienced hardship like 2017. The political stalemate after the August 8 elections exacerbated the situation but we must also remember that campaigns started early and both were factors that deeply affected the industry.

There was a lot of fear and politicians were charged in their utterances, which was not good for any business.

Other than the transport industry, this is also evident among motor vehicle dealers, where the matatu industry is a key client.

The dealers were not able to meet their targets by a huge margin and there was a huge decline in sales compared to what they had last year and even worse compared to 2015.

Going forward into 2018, we see normalcy returning, considering Kenyans are aggressive and tend to put behind incidences that could have happened.

Because of this, I believe business will pick up fast and we are going to get back to the position that we were at and even grow further.

There is confidence that other sectors will pick up fast. Matatus facilitate all these other sectors and so, we are optimistic of growth.?

Brand Kenya Board CEO Mary Luseka

The heavy politics throughout the year and fake news were among some of the toughest challenges she faced in her business of nation branding.

2017 was an amazing year for Kenya. Amazing because from the word go, there were so many challenges that seemed insurmountable but we were able to overcome as a country.

However, 2018 will be bigger and better championed mostly by the Kenyan spirit. I am very optimistic about 2018, I see a country that is building its brand in the global arena. There are untapped areas in Kenya’s economy which might be huge next year.

Contrary to popular opinion, malls as one of these key areas pointing out that African countries, especially in West Africa, which traditionally shop overseas can be lured to come and shop in Kenya. Another of the low hanging fruits is medical tourism. We spend Sh200 million on marketing Kenya.