Nairobi — Majority of CEOs expect a full resumption of normal operations upon the conclusion of the August 9 elections highlighting declined political uncertainty in the economy.
According to the latest Monetary Policy Committee (MPC) CEO survey, most surveyed firms are more concerned with high inflation and the cost of doing business as factors that could constrain their growth in the short term.
Additionally, respondents expressed concern on the weakening shilling and declining consumer purchasing power.
“Firms expect to mitigate these constraining factors through management of costs and risks, diversification of their businesses, increased sales and marketing and digitisation of their operations,” the survey published on July 27 read.
Further, most surveyed firms expect business activity to improve in Q4 with increased demand/ orders, production volumes and sales.
Optimism regarding growth prospects for the Kenyan economy remained largely at the same level, on the back of low Covid-19 infections.
Despite reduced political uncertainty, all sectors reported lower demand/orders largely due to a slowdown in business activity on account of the upcoming elections in August 2022 and high inflation which is impacting consumer purchasing power.
Nevertheless, the post-election election period presents better prospects for all sectors, the survey noted.
Consistent with previous surveys, business leaders indicated that diversification, improved efficiency/innovation, and skills retention/ talent development were key internal factors that could strengthen their outlook.
Externally, respondents indicated that political stability, a stable macroeconomic environment, an enabling business environment and stability of the Kenya Shilling are factors that could strengthen firms’ outlook in 2022.
Respondents foresee that inflation will begin to ease in the third quarter of 2022 hence positively impacting demand, production and sales volumes.
“While the prices of goods and services sold are expected to remain elevated, global oil prices are expected to begin declining hence start to ease the prices of goods and services sold,” the survey noted.