East Africa CEOs express optimism of growth prospects

CEOs from East Africa are expressing strong optimism about the growth prospects of their economies and companies over the next three years, despite ongoing global challenges such as geopolitical tensions, rising inflationary pressures, and looming recession. In a recent interview with CNBC Africa's Julius Bismungu Hismo, Gerald Kasimu, Head of Advisory at KPMG East Africa, shed light on the reasons behind this optimism. Kasimu highlighted the success of recent elections in the region, which have created a stable business environment conducive to growth. Additionally, the presence of a large, young consumer base in East Africa has been driving increasing demand, offsetting challenges like drought and political tensions. Most notably, 78% of CEOs in the region have a positive outlook on the growth prospects of their countries, while eight out of 10 CEOs are optimistic about the growth of their companies. This positivity is rooted in the emerging and developing economy of East Africa, which offers unique opportunities amidst the challenges. Kasimu pointed out that despite concerns like high interest rates and geopolitical issues, East Africa presents a promising landscape for growth. Disruptive and emerging technologies have emerged as a major concern for CEOs in the region, with 16% identifying it as their biggest threat. With a focus on digital transformation, businesses are striving to remain relevant, connected with customers, and competitive in the market. Beyond technological risks, CEOs also face challenges related to economic factors like interest rates and inflation, as well as reputational risks and the importance of environmental, social, and governance issues. Amidst the optimism, issues of tax compliance have also surfaced, with concerns raised over companies not fulfilling their tax obligations. In South Africa, for example, there is a growing public desire for companies to transparently report their tax contributions, highlighting the link between public trust and tax approach. Despite this, some companies have fallen short in meeting their tax responsibilities, emphasizing the need for improved compliance in the corporate sector. The COVID-19 pandemic has accelerated digital transformation across industries, prompting business leaders to make significant investments in technology. CEOs in South Africa have been particularly aggressive in shifting their investments towards digital opportunities to position themselves as industry leaders or fast followers, safeguarding against disruption from competitors. Overall, the outlook from East Africa CEOs remains positive, underpinned by a combination of stable political environments, growing consumer demand, and strategic investments in digital technologies.