Chief Executives in East Africa have reported a bullish economic outlook for the next 12 months, with 60% expecting an improvement in 2023, a survey said on Wednesday.
The sentiments are in contrast to their global counterparts who believe that there will be a decline in economic growth in their countries.,
According to PwC’s 26th Annual Global CEO Survey, this optimism may be driven by the strong economic growth recorded in the region in 2021, which was underpinned by sustained public spending on flagship infrastructure projects.
The survey polled 4,410 CEOs in 105 countries between October and November 2022; 138 CEOs from East Africa participated.
In addition to the optimistic economic growth outlook, East African CEOs are very confident of their respective companies’ prospects for revenue growth both in the next 12 months (55%) and the next three years (62%).
This optimism mirrors the outlook in the African Development Bank’s (AfDB) January 2023 Macroeconomic Performance and Outlook report. AfDB estimated that growth in East Africa will moderate to 4.2% in 2022 from 5.1% in 2021 and then rise to 5.0% in 2023 and 5.4% in 2024.
Risks
However, the region’s CEOs are most concerned about their exposure to rising inflation, macroeconomic volatility, climate change, and cyber risk in the next 12 months and five years.
According to the survey, inflation is a key concern for these CEOs, as 49% believe their companies will be highly exposed to this global challenge in the next 12 months.
Although the region experienced strong economic growth in 2021, inflation recently remained at its highest level.
According to the Africa Development Bank’s East Africa Economic Outlook 2022, the region’s inflation averaged 40.6% in 2021 and was the highest amongst all African areas.
“Therefore, it is no surprise that inflation ranked highest in the exposure to key threats category noted by the CEOs both in the short and medium terms,” the survey notes.
37% of the CEOs surveyed indicated they are partnering with the government at the national or local level to create new sources of value. A further 48% stated they were partnering with entrepreneurs/start-ups to a moderate, large or large extent.
The World Economic Forum highlighted Kenya as one of the only four African countries that currently receive 92% of all the continent’s investment in technology, the other three being Nigeria, Egypt, and South Africa.
Over a third (39%) of the CEOs polled they indicated collaborating with competitors.
“The risks facing organisations and society today cannot be addressed alone and in a vacuum. CEOs must continue to collaborate with a wide range of public and private sector stakeholders to effectively mitigate those risks, build trust and generate long-term value – for their businesses, society and the planet,” Peter Ngahu, Regional Senior Partner, PwC Eastern Africa, says.
