Companies in the agriculture, transport, tourism, ICT, and service sectors would have more opportunities for growth in the year 2023 according to 1,000 Chief Executive Officers drawn from private sector firms
CBK released a report titled CEO’s Survey in March 2023, 71 percent of the respondents appreciated the government’s efforts in the agriculture sector including the fertilizer subsidy program as well as the use of public land for farming.
According to the CEO, other factors attributed to projected growth in the sector include a stable economic environment, political stability, government stimulus programs, and adequate rainfall. The agricultural sector employs over 40 percent of the country’s population and more than 70 percent of Kenyans living in rural areas.
The report noted that firms in the sector reported lower production owing to the prolonged dry season and the weakening of the Kenyan shilling which indirectly led to higher prices of goods sold.
“Seasonal factors supported some firms to sell more but at lower prices. Overall, while purchase prices softened, inflation remained a key concern,” read part of the report.
Firms in the transport sector would anticipate a surge in demand and orders due to seasonal factors according to the CEOs. This would be credited to global economic recovery, enabling environment and regulatory issues.
In the service industry, digitization and increased marketing/better branding services were important factors to aid the sector.
“In the services sector, firms reported an increase in business activity notably in the security, tourism, and ICT sectors. Nonetheless, respondents rued the reduced consumer demand as well as limited availability of foreign exchange,” read part of the report.
The CEOs depicted that firms in the manufacturing sector would remain subdued owing to the limited availability of the US Dollar which resulted in the inability to source raw materials promptly.
“Additionally, due to global and domestic inflation, several value chains had been affected leading to price increases hence reduced purchases.”
To mitigate the factors constraining the expansion of firms, the CEOs proposed various internal solutions including management of costs and risks, increased sales and marketing, diversification of their operations, talent retention, lobbying with relevant stakeholders, and enhanced use of technology.
63 percent of the CEOs were from privately-owned domestic firms while the rests were privately-owned foreign businesses and publicly listed domestic companies. The majority of the CEOs, who were interviewed for the survey, had a turnover of over Ksh1 billion in their private firms.
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