The majority of Chief Executive Officers (CEOs) in Kenya view Tanzania and Uganda as key East African countries in which to grow their revenue, as they seek to make new acquisitions in the new year.
A survey by consultancy firm, PricewaterhouseCoopers (PwC) revealed three in ten CEOs see Tanzania (34 per cent) and Uganda (34 per cent) as important markets for their goods and services, a move that aims to increase their margins and enhance intra-EAC trade.
“Eoghty-six percent of CEOs in Kenya consider their neighbouring countries (Tanzania: 34 per cent; Uganda: 34 per cent; Rwanda: 18 per cent) as important territories for revenue growth in the next 12 months. At the time of the survey, CEOs in Kenya were optimistic about their respective company’s future growth prospects, based on previous performance,” the report read in part.
“Growing intra-EAC trade has fostered deeper regional integration between East African countries and boosted the common market among members.”
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Heightened trade and political tensions between the East African member states threatened to erode the gains of a free market and the dividends of a united bloc for a region expected to achieve the fastest growth across Africa this year.
PwC surveyed 4,702 CEOs in 105 countries, including Kenya from October 2 through November 10, 2023.
EAC trade is dominated by agricultural commodities, namely coffee, tobacco, cotton, rice, maize, wheat and tea.
Manufactured goods (cement, petroleum, textiles, sugar, confectionery, beer, salt fats and oils, steel and steel products, paper, plastics and pharmaceuticals) are also traded across the region.
Uganda and Tanzania are the main exporters to Kenya within EAC.
The agricultural sector accounts for 25 per cent to 40 per cent of the gross domestic product of EAC partner states (Kenya, Uganda, Tanzania, Rwanda, Burundi and the Republic of South Sudan).
The sector employs more than 80 per cent of Kenya’s rural population.
According to the EAC Trade and Investment 2022 Report, Kenya’s trade with the East African Community’s partner states increased by 8.8 per cent in 2022, from $1.65 billion in 2021 to $1.79 billion.
Kenyan top company executives despite having a cautious stance on their business viability are looking to the future with expansion plans.
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“A substantial 56 per cent of CEOs expressed their companies’ plans to make one or more acquisitions in the next three years. This marks a notable shift from the 82 per cent of CEOs who reported no major acquisitions in the preceding three years,” the PwC report read in part.
The report did not highlight the region in which these executives were looking to make the acquisitions however pointing out East Africa as an important bloc to their business operations and profitability.
Data published by the Kenya National Bureau of Statistics (KNBS) shows growth in export earnings to other African countries last year was largely driven by higher demand for cement clinkers, lubricants, wheat flour, food preparations and re-exports of kerosene-type jet fuel from Kenya, amid President William Ruto’s aggressive diplomatic offensive.
The increased purchase of goods from Kenya was largely made by traders from Uganda, DR Congo, Tanzania, Somalia and South Sudan.
This came at a time when President Ruto championed the removal of trade barriers amongst African countries to ease the movement of goods, services and labour through the integration of regional trading blocs.
Uganda remained the country’s largest destination for Kenyan goods, accounting for more than a third (35.33 per cent) of exports to Africa. By Edna Mwenda, The East African
