Kenyan CEOs bullish about investment

Politics and policy

 

An investor at the Nairobi Securities Exchange August 1, 2014. A number of firms have been raising funds to expand. PHOTO | SALATON NJAU 

By NEVILLE OTUKI

In Summary

• Kenyan CEOs are more bullish about business prospects than their peers in South Africa and Nigeria, a new global survey shows.
• The survey attributes Kenya’s CEOs’ high confidence level to the high number of capital goods and expansion plans for the remaining half of the year.
• The survey conducted every three months bases its findings on employment, sales forecast and fixed investments plans.

Kenyan chief executives aged 45 and below have been ranked among Africa’s most optimistic industry leaders despite security concerns and unpredictable weather that have threatened investment in the first half of the year.

They are more bullish about business prospects than their peers in South Africa and Nigeria, a new global survey shows.

The Young Presidents’ Organisation (YPO) Global Pulse Confidence Index for Africa released on Tuesday puts Kenya CEO’s confidence level in the second quarter at 65 points, above South Africa’s 64.6 and Nigeria’s 56.3.

The survey attributes Kenya’s CEOs’ high confidence level to the high number of capital goods and expansion plans for the remaining half of the year.

“Kenya’s higher index level is partially attributable to the fixed investment component of the index. Overall, participants in Kenya had more widespread plans to boost capital expenditures than in the listed countries,” Michèle Foster of YPO Global Pulse told the Business Daily by email.

The survey was conducted electronically last month with 169 CEOs aged 45 and below being polled.

It indicates that while business confidence levels of Kenyan CEOs has been dropping gradually since January when it soared to 68.2 points, it still remains higher than peers in Nigeria and South Africa.

The current confidence falls below the 76.5 points that Kenya’s young industry captains scored in the first quarter of 2013.

It, however, represents marked improvement from the 59.4 points in the first half of last year when it ranked below South Africa (63.4) and Nigeria (69.4). The Kenyan leaders’ rating is also above Africa’s average of 61.9 points.

The survey conducted every three months bases its findings on employment, sales forecast and fixed investments plans.

It covers West Africa (Nigeria), East Africa (Kenya) and South Africa with the aim of capturing the outlook of businesses in the next one year.

“From a regional perspective, CEO sentiment softened in Africa over the first quarter, but there is still clear optimism about business and investment across the continent,” said Paul Berman, chief executive officer of Cape Town-based Berman Bros Property Holdings (Pty) Ltd and chair of YPO’s Africa region.

He added: “Africa, however, still has work to do in developing and advancing a new business culture in which investors and entrepreneurs enjoy the freedom of opportunity to innovate.”

The YPO is a non-profit global network of young chief executives connected around the shared mission of becoming better leaders.