Empowering African Businesses

Credit Squeeze, Drought and Protracted Elections led to below par GDP: Survey

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Global publishing, research and consultancy firm Oxford Business Group (OBG) through a survey of over 100 C-Suite executives from across Kenya’s industries has noted bullishness on the country’s economic prospects for the coming year in the inaugural Business Barometer Survey Report.

Under the banner ‘Facts and Numbers’, OBG has released the first edition of the business barometer: Kenya CEO Survey in partnership with the Kenya Investment Authority (Keninvest) designed to assess business sentiment amongst business leaders (Chief Executives or equivalent) for the next 12 months.

From the 136 CEO’s interviewed, 95% felt either positive or very positive about local business conditions for the coming year as 75% of respondents say that it is likely or very likely that their company will make significant investment within the next 12 months.

A sizeable majority (89%) of respondents noted that the decision to cap commercial interest rates at four percentage points above the Central Bank of Kenya’s benchmark rate had improved the cost of borrowing but it made borrowing either more difficult or much more difficult.

Commenting on the results, OBG’s regional editor for Africa noted that 2017 was undoubtedly a challenging year for Kenya, especially its small businesses due to the tighter risk management tools implemented by lenders.

“Establishing an enabling environment for Kenya’s private sector and SME’s to grow and carry out their investment and development plans in the years to come will play a crucial role in the success of President Uhuru Kenyatta’s Big Four agenda, which targets four key pillars, manufacturing, affordable housing, healthcare and food security over the next five years.’’

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Ann Kirima Muchoki, chairperson of KenInvest, noted that while the factors such as credit capping, drought and protracted elections had combined to keep GDP growth in Kenya below 5% in 2017, the strong business sentiment evident in OBG’s survey reflected an improving outlook.

“Positive developments in key areas of the economy, including the tourism industry and significant rainfall in the latter part of 2017, are among the positives noted by both a nalysts and business community.” She said.

The launch included a panel discussion in which panelists including Nick Nesbitt, chairman, Kenya Private Sector Alliance; Vimal Shah, chairman, Bidco; Corine Mbiaketcha Nana, managing director, Oracle Kenya; and Jeremy Awori, managing director, Barclays took part in to try to make sense of the survey.

The OBG Business Barometer: CEO Surveys feature in the Group’s extensive portfolio of research tools. The full results of the survey on Kenya are in the link

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