Kenyan CEOs are optimistic that the economy will continue to perform well despite the August elections and high commodity prices, Central Bank of Kenya (CBK) says.

The three surveys conducted ahead of the this week’s MPC meeting — Private Sector Market Perceptions Survey, CEOs Survey, and the Survey of Hotels — revealed continued optimism about business activity, employment, and economic growth prospects for 2022. 

“The main drivers of the optimism were early rains which are expected to be sufficient, continued investment in infrastructure and Kenya’s recovery from the Covid-19 pandemic,” according to the surveys.

Nevertheless, respondents were concerned about the impact of the Russia-Ukraine conflict on commodity prices and supply chains, in addition to the increased political activity. 

Supply chain

The invasion of Ukraine by Russia last month increased supply chain disruptions, especially for food, oil and natural gas.

The surveys says bank CEOs were the most optimistic with 87 per cent of them feeling optimistic in the month of March. However, private sector optimism in general reduced compared to the previous months to stand at 59 per cent compared to 65 per cent in the first two months of the year. The banking sector regulator left the base rate at 7 per cent in the Tuesday MPC meeting hoping to lubricate the wheels of the economy despite rising uncertainty that drove other central banks in Africa to start raising interest rates.

The Survey of Hotels revealed continued recovery in the sector, with a majority expecting a return to pre-pandemic level of operations by the end of 2022. Hotel industry has been recovering strongly with most of the hotels reopened. Governor Patrick Njoroge said Radisson Hotel and Norfolk hotels are set to open showing increased optimism in the market. 

“The point here is that these numbers are better than what we have seen before, there is still some way to go, the hotels need to feel confident that they can take on people on a permanent basis,” he said.The doors of Nairobi’s iconic Fairmont The Norfolk is set to reopen today after the establishment shut down for over 21 months amid the coronavirus crisis.

The hotel, which is run by French hospitality giant Accor, said it will reopen this month and is now ready to host guests in a boost for its employees.

Welcome guests

“We are pleased to announce that Fairmont the Norfolk will reopen on April 1, 2022 to welcome guests and visitors,” Accor Kenya country general manager Mehdi Morad in a notice. “The hotel and Accor regional team have worked closely together to reopen the hotel and its facilities.”