Expectations for growth in companies, industries, and businesses worldwide over the next year have improved. In Kenya, CEOs are feeling more positive about the economy because the value of the Kenyan currency has gone up.
According to the March 2024 CEOs Survey by the Central Bank of Kenya (CBK), the positivity is also informed by the prices of commodities not increasing as quickly, and there are predictions of good weather.
However, the survey found that the businesses are struggling to grow because they continue to face challenges like higher expenses, more taxes, the state of the economy, and people having less money to spend.
“The Survey assessed the CEOs optimism in the growth prospects for their companies, sectors, and the Kenyan and global economies over the next 12 months. Business optimism for company, sector, Kenyan, and global growth prospects over the next 12 months improved.
“However, liquidity constraints and increased cost of borrowing, rising cost of production, particularly energy costs, uncertainty around taxes and declining consumer purchasing power were identified as potential challenges,” the report indicated.
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CEOs Lists Measures Businesses Can Implement to Make More Revenue
At the same time, the CEOs indicated that businesses could strengthen their operations and record revenue growth by managing costs and risks and digitizing their processes.
Businesses can also implement mitigation measures including innovation, diversification of revenue streams, services and products, research and development and increased marketing to manage these constraints.
Others include lobbying with relevant stakeholders, development of the necessary skills to run the venture or hiring and retaining talent with the required skills, better branding, and restructuring or relocating the business.
On the other hand, external factors such as a macroeconomic stability, certainty around taxation issues and easing cost of doing business could positively impact on firms’ outlook in 2024.
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Sectors Where Business Will Improve and Why
Firms in the health sector expect growth to be supported by government initiative in the roll out of the universal healthcare (UHC) program according to the CBK survey.
Additionally, innovation in the education sector through intensification of online learning programs is expected to accelerate growth in the sector because it has led to increased demand and expansion.
Also, the CEOs said that the Government affordable housing program has continued to support growth in the real estate sector, while the agriculture sector growth is largely accounted for by good weather prospects.
“Good performance in the agriculture sector is expected to support manufacturing sector through the agro processing linkages. Firms expect increased demand to be met through utilization of existing idle capacity and continued leveraging on technology,” the report stated.
The ICT and communication sector growth is largely driven by higher demand as digitization of processes expands.
“Growth prospects for the services sector over the next 12 months continued to improve, driven by seasonality and sector specific demand in health, education, ICT and communication, wholesale and retail trade,” it added.
