- At least 22 per cent of them said the growth prospects will decline whereas eight per cent said it will stay the same.
- On the global front, 44 per cent of the CEOs believe the GDP growth will improve while 37 and 19 per cent believe the outlook will decline and remain the same, respectively.
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The majority of East African CEOs believe the GDP growth prospects for the region this year will be positive.
The latest East Africa CEO survey conducted by the professional services firm PwC shows 70 per cent of the company heads nodded to the positive growth trajectory, saying it will improve.
At least 22 per cent of them said the growth prospects will decline whereas eight per cent said it will stay the same.
On the global front, 44 per cent of the CEOs believe the GDP growth will improve while 37 and 19 per cent believe the outlook will decline and remain the same, respectively.
The positive outlook in East Africa, according to the CEOs, will be aided by deeper regional integration alongside strategic public spending to improve infrastructure investment, and ongoing efforts to modernise agricultural production systems and boost productivity in the services sector.
Kenya at 26 per cent and China 21 per cent continue to top the list as the most favourable countries for CEOs’ companies’ revenue growth prospects over the next 12 months.
They also identified neighbouring countries that are members of the East African Community (EAC) as territories for future revenue growth.
Africa’s macroeconomic performance and outlook - January 2024, projects growth in East Africa this year at 5.1 per cent and 5.7 per cent next year.
With this, the regional block aims to increase intra-EAC trade from 20 to 40 per cent over the next five years, which could unlock future revenue growth opportunities.
Intra-EAC trade reached $10 billion in September 2022, up from $7.1 billion in 2019.
The survey also highlighted some of the medium-term challenges that will characterise the positive growth outlook.
Notably, 45 per cent of the respondents identified the regulatory environment as a significant obstacle, indicating the potential impact of compliance requirements on operational flexibility.
Limited financial resources also pose a constraint, with 35 per cent of CEOs citing financial constraints as inhibiting factors.
Additionally, concerns were raised about the lack of skills within the company’s workforce ( 29%) and competing operational priorities ( 26%). Infrastructure challenges ( 24%) and a shortage of technological capabilities ( 23%) added further pressure on operations.
Supply chain instability ( 2 2%) and bureaucratic processes within the company ( 14%) were also cited as barriers to value creation. Commenting on the challenges, Muniu Thoithi, the advisory leader of PwC East Africa, says in the current era of continuous reinvention, CEOs must spearhead the transformation journey to reshape both their organisations and themselves to flourish.
“Amidst disruptions, company heads must lead the quest for strategic discovery and evolve sustainable approaches to value creation,” Thoithi says.
“CEOs committed to reinvention must foster environments that embrace and acknowledge innovation, prioritise curiosity and a willingness to learn, and empower managers to assist individuals in adapting to change.”
Technology was pointed out as the key driver for companies positioning for change in coming years, with most of the surveyed CEOs acknowledging the crucial role of technology in driving value creation over the past five years.
More than half, 55 per cent, prioritised adopting new technologies according to the survey.
“This reflects the region’s ongoing efforts to embrace innovation across various sectors,” PwC says.
“Reports from the Kenya ICT Action Network (KICTANet) highlight the emergence of tech-driven solutions addressing critical challenges and opportunities on the continent, spanning areas such as mobile money, fintech, e-learning, agritech, health tech, and clean energy.”
Besides the positive growth trajectory, the East African CEOs indicated that their revenues increased by 19 per cent, along with an 18 per cent boost in profit margins last year.
They also said their return on assets (ROA) or return on equity (ROE) rose by a notable 14 per cent.
Furthermore, over half ( 53%) of them reported a significant market share increase of five per cent or more over the past three years.
As a result, 55 per cent of the surveyed CEOs are confident that their business models will remain viable for more than ten years if they continue to operate on their current path.