Businesses in the agriculture, transport, tourism, ICT, and service sectors are projected to have more opportunities for growth in 2023.

This is according to the latest report by the Central Bank of Kenya (CBK) titled CEO’s Survey March 2023. The survey featured 1,000 Chief Executive Officers drawn from private sector firms.

The Apex bank noted that in the three months to March 2023, businesses in the Services sector reported higher sales growth compared to other sectors.

Most of the firms that reported increased sales were in the security, tourism, and ICT sectors. Increased demand, particularly for financial and security services, was credited for the growth.

‘’Nonetheless, respondents rued the reduced consumer demand as well as limited availability of foreign exchange,’’ said CBK.

While the agriculture sector reported low production in the first quarter of the year, demand remained high. The low production was attributed to the prolonged dry season and the weakening of the Kenya Shilling, which indirectly led to higher prices of goods sold.

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“Seasonal factors supported some firms to sell more but at lower prices. Overall, while purchase prices softened, inflation remained a key concern,” read part of the report.

CBK projects increased production volumes in the agriculture sector in the next 12 months hence higher sales. The projected growth will be supported by adequate rainfall and seasonal factors.

Businesses in transport and storage anticipate a boost in demand due to seasonal factors. Nevertheless, purchase prices are expected to remain elevated.

CBK said firms that reported possible difficulty in expanding their operations cited the high cost of doing business, a constraining business environment, and the high cost of credit.

Other factors cited for holding back firms’ expansion include reduced consumer demand; financing challenges; internal operational constraints; and supply chain challenges.

For instance, in the manufacturing sector, CBK said that the limited availability of the US Dollar made firms unable to source raw materials in a timely manner.

Additionally, due to global and domestic inflation, several value chains had been affected, leading to price increases and hence reduced purchases.

Businesses in the manufacturing sector anticipate a decline in sales and production due to increasing energy and electricity costs as well as a weakening Shilling.

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To mitigate the factors constraining the expansion of firms, the CEOs proposed various internal solutions, including management of costs and risks, increased sales and marketing, diversification of their operations, talent retention, lobbying with relevant stakeholders, and enhanced use of technology.