Kenya tops regional peers and China in growth prospects among executives

Kenya is listed as country with the most growth prospects in the next year. [iStockphoto]

Business executives in the region have listed Kenya as the country with the most growth prospects in the next one year in the latest survey.

Kenya tops China and East African Community (EAC) economies in the prospect list as documented in the survey published by consulting firm PwC.

The survey shows that inflation is the leading threat to businesses in the region, followed by the tough regulatory environment.

The East Africa CEO Survey also ranks macroeconomic volatility as a top concern for regional and global chief executives. Issues like climate change and social inequality are ranked at the bottom of the list of concerns for East African executives.

PwC surveyed 4,702 CEOs in 105 countries and territories from October 2 through November 10, 2023, with a total of 380 in Sub-Saharan Africa.

The report is dated February 2024.

When asked ‘How exposed do you believe your company will be to the following threats in the next 12 months’, inflation topped the list with 42 per cent of the responses, followed by macroeconomic volatility at 33 per cent, cyber risks at 22 per cent, geopolitical conflict 22 per cent, climate change 17 per cent, health risks 13 per cent and social inequality eight per cent.

The survey titled, Thriving in an Age of Continuous Reinvention, states that 70 per cent of East Africa CEOs are optimistic about their local territory’s growth prospects over the next 12 months.

“This can be attributed to the uptick in infrastructure investment in the region, tourism recovery and economic diversification. Despite ongoing challenges, their companies’ positive financial performance may also increase confidence in local economies,” says PwC in the survey.

Last year, inflation as a concern stood at 49 per cent, macroeconomic volatility at 33 per cent and cyber risks at 28 per cent. During this period, East African CEOs indicated that their revenues increased by 19 per cent, along with an 18 per cent boost in profit margins.

They said their return on assets or return on equity rose by 14 per cent, with over half (53 per cent) of CEOs reporting market share increase of five per cent or more over the past three years.

“As a result, 55 per cent of East Africa’s CEOs are confident that their business models will remain viable for more than ten years if they continue to operate on their current path,” states the survey.

When asked about prospects for growth in external markets, Kenya (26 per cent) topped the list of most favourable countries for CEOs’ companies’ revenue growth prospects in the next 12 months, followed by China (21 cent) and South Africa  (18 per cent).