Inflation top issue for local CEOs in 2025

Inflation tops the list of worries by Kenyan chief executives this year, according to the latest PwC 2024 CEO Survey for Kenya.

Despite softening in the recent months to a low of 3.5 per cent in February, Kenyan business leaders rate it as the major threat, followed by global macro-economic conditions.

This figure stood at 9.2 per cent in February 2023, which affected the cost of living as consumers had to bear the added cost of production incurred by manufacturers. This was due to the risen cost of fuel.

The PwC report released Tuesday notes that despite ongoing geopolitical and trade tensions, Kenyan CEOs are optimistic about the global economy’s future.

According to the report, 60 per cent of Kenyan CEOs anticipate an improvement in global expansion of gross domestic product (GDP), while 48 per cent are confident but cautious about the local economy.

The report documents growth of 5.7 per cent in Kenya while refencing the Central Bank of Kenya (CBK) findings that this projection may be tampered by the high cost of doing business, subdued consumer demand and increasing geopolitical conflict. “When asked about the economic growth of their local economy, Kenyan CEOs were cautiously confident, with 48 per cent of them saying that it will improve and 25 per cent saying it will stay the same in the next 12 months,” the report says.

As global inflation is expected to decline to 4.2 per cent in 2025, according to the 2025 World Economic Outlook Update, PwC contrasts this with the finding that it remains top of mind for all CEOs. “For Kenyan CEOs, 35 per cent said they are highly exposed to inflation in the next 12 months,” the report says.

This is higher compared to 27 per cent for global CEOs. Some 28 per cent of CEOs list macro-economic volatility as a threat, while 25 per cent are more wary of cyber threats. Climate change is the least threat for Kenyan CEOs at 10 per cent. PwC Country and Regional Senior Partner for East Africa Peter Ngahu said Kenyan CEOs remain focused on innovation and adapting to evolving market conditions.

“Kenya is leading in terms of digital maturity within the East Africa region, from broadband expansions, mobile money platforms, and fintech solutions. This is an exciting time of change as technological disruption and other megatrends are driving a fundamental reconfiguration of our production systems as we know them today, creating new domains of growth,” said Mr Ngahu. The report documents strong confidence amongst Kenyan CEOs (65 per cent) about the economic viability of their business for the next decade if they continue on their current path.