The Central Bank of Kenya (CBK) has revealed that Kenya CEOs are optimistic that the services and agriculture sectors will bounce back and record higher growth prospects for the year.
In the report, a majority of CEOs' optimism of the higher growth prospects for their companies and sectors in the next 12 months was mainly due to the rollout of the Covid-19 vaccines and the continued reopening of the economy which signaled gradual recovery.
The survey dubbed the Monetary Policy Committee CEOs Survey was conducted in March 2021 jand targeted CEOs of 130 private sector firms comprising members of the Kenya Private Sector Alliance (KEPSA) and the Kenya Association of Manufacturers (KAM).
The Central Bank found that the services and agriculture sectors, though affected by the pandemic, were forced to be innovative allowing for unlocking of opportunities to expand following the pandemic.
While responding to the survey, the business leaders indicated that internal cost containment, improved efficiency and innovation, and skills retention were key internal factors that could strengthen their outlook.
Some CEOs were of the opinion that an improved regulatory environment/tax regime, a stable economic environment and easing of the cost of doing business could strengthen the outlook of their firms over the same period.
On the other hand, some respondents did not expect a change in the growth prospects of their companies or sector over the next 12 months citing the continued effects of the pandemic, low purchasing power following reversal of the Covid-19 tax relief measures, and the effects of recent increases in fuel prices.
On a bitter-sweet note, most CEOs in the manufacturing sector noted that the number of full-time employees remained the same during the Covid-19 pandemic with some saying staff were still on pay cuts.
Most CEOs indicated a recovery in business activity in the first months of 2021 as compared to the last months of 2020 which was mainly reflected by increased orders and production volumes.
A number of them expected an increase in business activity in the coming months particularly with regard to demand, production volumes, and growth in sales of goods and services.
Moving forward, the business leaders stated that they would leverage on their firms’ top strengths, which they identified as technical capability/skilled workforce, a strong brand, and effective supply chains, to manage costs and risks, lobby with the government as well as digitize and innovate to address their most urgent concerns.
"In terms of strategic direction over the next three years, business leaders plan to expand into new markets, improve brand/value proposition of their current products and develop new products through horizontal diversification and vertical value addition," the report found.
