Nairobi — A new Central Bank of Kenya CEO survey shows that most CEOs expect their companies to experience muted growth in the second quarter, as the country’s economic conditions remain largely unchanged. Respondents highlighted the high cost of inputs—particularly electricity and farm supplies—as a key factor that will keep business activity at roughly the same level as in Q1 2023.
Nevertheless, the survey notes that increased government spending associated with the close of the financial year is expected to support business activity, while seasonal factors may boost agriculture, transport, and storage firms. Companies in the agriculture sector are hopeful that adequate rainfall will help manage short‑term risks, even though purchase prices remain a major concern. Seasonal influences are also expected to lift sales.
Manufacturing firms, on the other hand, anticipate a decline in sales and production due to rising energy and electricity costs and a weakening Kenyan shilling. Transport and storage companies, as well as those in the ICT sector, expect a boost in demand and orders thanks to seasonal factors, but purchase prices are projected to stay elevated across all sectors.
CEO optimism is tempered by worries about domestic inflation, the depreciating shilling, prolonged drought, and the cost of credit. Externally, firms cite global inflation, a potential global recession, and high energy prices as threats to their expansion plans. To mitigate these constraints, companies plan to manage costs and risks, diversify their businesses, increase sales and marketing efforts, and digitize operations.
The survey concludes that a stable macro‑economic environment, an enabling business climate, and a stable Kenyan shilling would strengthen firms’ outlook for 2023.
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