Kenya's top executives gaze into the 2023 crystal ball

Equity Group CEO James Mwangi

"The biggest trend we shall see is diversification. The world will not depend on a few countries like we have been depending on Ukraine and Russia for food, Indonesia and Mauritius for vegetable oil, and China for manufacturing. That is a foregone conclusion. You will see that shaping 2023. Africa is best strategically positioned to benefit from the reset in the global economy. Africa has 60 per cent of arable land, that has not been utilised. This will be utilised to bring diversification.

It is the land with the largest labour force of young people, so most likely it will become the next global manufacturing factory for the world. And that might be accelerated by the political tensions between the US and China. Chances are that American private capital is unlikely to put huge investments in China. The next destination is likely for them to be Africa. The biggest opportunity for Africa then is agriculture. We have seen Ethiopia double its wheat production in two years. The recent US Africa Summit seems to have reset relations between Africa and the US.

We are also lucky to be in a region that holds 40 per cent of all the strategic green minerals, which will help reset the global energy consumption, particularly the battery manufacturing minerals, with DRC having 40 per cent of the world's supply. East Africa will be the biggest beneficiary of agricultural diversification and manufacturing. This is where I see 2023 being defined as a great opportunity. Back home the resolution of political risk (around the August election) is a big thing. From a political perspective, the Executive seems to be saying the right things.

The policy shift to focus on production subsidies as opposed to consumption subsidies is a very big thing. It encourages people to produce rather than consume. Production is what determines the size of an economy. That shift is bigger than people are seeing. The focus on debt management is also a major shift. This government is inheriting a very solid infrastructure."

Kenya Airways (KQ) chairman Michael Joseph

"It's always difficult to predict what might happen at the beginning of a new year, particularly economically, but I feel that 2023 will be a good year for Kenya.

I think there is a new spirit of optimism in the country - a new President, a new administration and a new sense of moving on from the past. If the President keeps to his word and manages his Cabinet and administration with strict performance targets, we should see more discipline and real delivery of results, which will impact the whole economy. It's a big "if," but I think we can and should expect that from this new administration.

Kenya National Chamber Of Commerce and Industry president Richard Ngatia. [Wilberforce Okwiri,Standard]

Despite sectors such as tourism and hospitality recovering, we entered another period of economic uncertainty as Kenyans prepared for the 2022 General Election amidst global geo-political tensions that distorted international trade value chains, leading to a surge in consumer energy prices and increased cost of living. However, the conducting of peaceful elections has since given confidence to investors, and we have witnessed multinationals such as Google and Moderna accelerate plans to build their first African facilities in Kenya.

The year 2023 presents greater opportunities to expand the key manufacturing, agriculture, healthcare and ICT sectors and increase investors' participation in Special Economic Zones and in mega infrastructure projects through Public-Private Partnerships (PPPs). Government initiatives, including the Hustler Fund, will enable small businesses to stay afloat and sustain livelihoods.

We are working closely with the government, financial institutions and development partners to support Micro, Small and Medium Enterprises (MSME) financing, innovation and digitisation to scale up their capacity in local, regional and global value chains as the African Continental Free Trade Area (AfCFTA) agreement takes off."

Grant Thornton Kenya CHIEF operating officer Kunal Ajmera

Domestically, the new government is making all the right noises, and after a peaceful transition of power, it has made economic development its number one priority. I see these efforts continuing in the New Year with due sincerity. One of the major concerns remains the current level of debt with a $2 billion Eurobond maturing for repayment by June 2023. There will be significant pressure on the government to raise revenue for debt servicing, which now takes up the majority of our income. I expect the debt crisis to worsen with the dollar rate continuing to strengthen next year.

However, most of the challenges we face will be external and not so much internal. There are multiple factors that are beyond our control and will have a direct impact on growth next year. These factors overall portray a negative economic outlook. The US economy by all accounts is heading towards a recession and whenever the US economy sneezes, the world economy catches a cold.

Also, the continuous rate hike by the Federal Reserve will lead to capital flight from developing countries like Kenya as people look for safer avenues to park their money. The Russia - Ukraine war shows no signs of ending and continues to destabilize the global economy. The supply of oil, gas and food grain is severely affected and will continue for a foreseeable future. While the commodity prices have reduced from their peak, they are unlikely to return to pre-covid levels.

The inflationary pressure will continue to be there. China is in the midst of one of the most widespread Covid-19 outbreaks currently and it is expected that there will at least be two more brutal Covid 19 waves there before things get back to normal. This is bound to create severe supply chain issues and significant delays in the export of goods. Global trade will directly be impacted as China slowly staggers to normalcy and production resumes."

KCB Group CEO Paul Russo

"Kenya's economy continues to demonstrate resilience supported by growth in manufacturing, transport, education, accommodation and food services as well as general trade. On the other hand, the private sector continues to be dynamic, presenting a lot of opportunities for business growth and development. In 2023, Kenya's economy is projected to grow by 5.3 per cent, supported by strong services and manufacturing sectors despite the contraction of agricultural production. The East African region is expected to grow by 5.5 per cent and will emerge as the top performer in growth among the regions of the continent despite the worst drought being experienced in the last four decades.

Kenya Association of Manufacturers chairman Rajan Shah. [Wilberforce Okwiri, Standard]

Overall, 2022 has seen demand slow down and margin erosion in many sectors of manufacturing. Global inflation concerns leading to higher interest rates will continue to remain a concern globally. Closer to home, our macroeconomic concerns around dollar shortages and how to service the Eurobond debt will remain top-of-mind agenda. We expect the food and fuel inflation will be more controlled in 2023, leaving more disposable income available to jumpstart the economy. In addition, the government's greater fiscal discipline to control wastage in expenditure is something to watch in terms of whether it shall bear fruit in closing the funding deficit.

The industry is also looking forward to more deliberate policies from the government around the growth of local manufacturing and especially focusing on quick reforms in taxation policy and the regulatory environment. This should ease the cost of doing business and make local industries more competitive.

The export-led growth agenda is also important, and we should start seeing how certain sectors will play a more significant role in expanding their export markets, primarily around some of the agricultural value add industries. Overall, we expect to see a better outlook in 2023 subject to no further global shocks and the ease in global inflation. The government's pro-local manufacturing agenda is also welcome if some of the policies can be implemented urgently."

Federation of Kenya Employers CEO Jacqueline Mugo

"The economic outlook for 2023 remains muted. Global geopolitics, particularly the war in Ukraine continues to push up the cost of food and energy prices, which has a ripple effect on other key economic indicators. Growth projections indicate a slowdown/contracting of all regions of the world. There's even talk of recession. Indications are that Kenya's GDP will be 5.5 per cent in 2022 but will drop to 4.8 per cent in 2023. So we all need to tighten our belts to cope with the high cost of living. The government is under pressure to deliver on the election promise to improve the lives and livelihoods of Kenyans. For employers, we remain focused on positive engagement with the government on win-win partnerships to address and redress the situation."

Tropikal Brands Afrika Chairman Linus Gitahi

"I am optimistic. We have a government that is determined to succeed, which helps. 2022 was driven by global issues led by the war in Ukraine that triggered inflation around the globe. This is likely to ease in 2023 and with this stability, the prices of goods and services are likely to stabilise or fall giving a fertile ground for growth."

Naivas chief commercial officer Willy Kimani

"From a retail perspective, we expect increased spend and more price normalisation in 2023. We expect better planning as we have a stable government and at the same time normalisation of the school calendar and the global supply chain."