CEOs in Kenya are apparently cautiously optimistic about the global economy according to a new survey by PWC. The survey is titled PWC 2024 CEO survey.
56% of them are saying the global economy will either improve or stay the same in the next 12 months. This echoes the sentiment of global CEOs, where 54% said the global economy will either improve or stay the same within the same period. 60% of the Kenyan CEOs attribute 20% of their company’s sales in 2023 to new products and services they have introduced in the last three years.
58% of Kenyan CEO view that inflation continues to be a significant threat, however 56% are confident about their revenue growth in the next three years.
Commenting on this year’s survey, Peter Ngahu, Country and Regional Senior Partner, PwC Kenya and Eastern Africa said, “There is a great deal of uncertainty in the world right now. The long-term effects of COVID-19, geopolitical tensions and conflicts, climate change and a slowdown in the global economy have somehow made CEOs in Africa accustomed to uncertainty”.
In dealing with current threats, 58% of the Kenyan CEOs believe they are highly exposed to threats of inflation while 50% indicate that limited financial resources inhibit how they create, deliver and capture value.
Muniu Thoithi, Advisory Leader for PwC East Africa pointed out that, “In an era of continuous reinvention, CEOs must spearhead the transformation journey to reshape both their organisations and themselves to flourish amid disruption. CEOs must lead the quest for strategic discovery and evolve sustainable approaches to value creation. 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”.
“CEOs and their leadership teams ultimately need to have a clear sense of how deals, projects or other investments create, maintain and grow value, and should be willing to make tough calls, which may include the reallocation of resources from legacy businesses or redefining a company’s industry boundaries and ecosystem partners. There is significant merit in looking beyond the confines of a company and embracing broader business ecosystems. Collaborating across industry boundaries through joint ventures or alliances enables companies to create greater value than they could achieve alone. PwC’s analysis suggests that, in the automotive industry alone, as the industry electrifies and encompasses more technology and data, its ecosystem revenues could more than double by 2030” says Isaac Otolo Deals Partner PwC Kenya.
60% of the Kenyan CEOs are in progress with some of the climate actions such as improving energy efficiency, improving climate-friendly products, services, and technology (50%), and upskilling or re-skilling their workforce to prepare them for climate driven changes in their business model (42%). Moreso, 14% of CEOs indicated that they are currently selling products, services or technologies that support their customers’ climate-resilience efforts.
“Climate-friendly investments often require significant upfront expenditure for renewable energy infrastructure, energy-efficient technologies, or sustainable practices. In addition, the transition to a low-carbon economy will involve regulatory changes and shifting consumer preferences. This uncertainty can create volatility in the market for climate-friendly investments and a higher perceived risk for investors. Despite these challenges, there is growing recognition of the long-term value of climate-friendly investments. As technology improves, costs decline, and market preferences shift, the financial performance of climate-friendly investments is likely to improve over time”. Edward Kerich, Partner and Environmental Social & Governance Leader, PwC Kenya.
Although CEOs see generative AI as a tool that will increase their work efficiency and how they deliver and create value, they also expressed their concerns about its unintended consequences. A total of 78% of CEOs believe that in the next 12 months, the unintended consequences of AI will increase their exposure to cyber attacks. The increased exposure to the spread of misinformation is also a concern to 64% of the CEOs.
“The pace of technological change is happening faster than the institutional capacity to adapt to it. With the rise of generative AI, and its potential and attendant risks, CEOs must create a culture in which companies move fast but with a commitment to managing risk. East African CEOs are cautious about integrating AI into their operations, and many believe that generative AI could heighten their cybersecurity risks, potentially hindering their company’s growth. CEOs should weave cybersecurity objectives into their business priorities to promote strategic dialogue between the board, CEO and the rest of the C-suite. Creating long-term value will require investment in skills and culture, risk and governance, as well as cloud and data infrastructure. Used responsibly, AI has the potential to enhance productivity and drive growth”, asserted Laolu Akindele, Technology Partner, PwC Kenya.
PwC surveyed 4,702 CEOs in 105 countries and territories from 2 October through 10 November 2023. The industry and country-level figures are based on unweighted data from the full sample of 4,702 CEOs. They included 4,088 men, 521 women, and 93 who identified with another gender or preferred not to say.