As the world enters a new era dominated by artificial intelligence, CEOs in East Africa are preparing for heightened competition as companies harness AI to create and enhance value across the region.

According to the East Africa CEO Survey 2024 conducted by audit firm PwC, chief executives in the region acknowledge AI's potential to improve their companies' trust with stakeholders (54 percent) and enhance the quality of their products and services (59 percent).

A significant majority (73 percent) of CEOs observed that generative AI will substantially alter how their companies generate, deliver, and capture value.

Furthermore, 71 percent of CEOs believe that generative AI will require their workforce to acquire new skills, demonstrating a proactive approach to talent development.

Additionally, 68 percent of CEOs project that generative AI will increase competition within their industries, underscoring the expected transformative impact of this technology on market dynamics.

Over the next 12 months, a majority (71 percent) of East African CEOs anticipate that AI will improve efficiencies in their own work schedules, with 68 percent expecting similar benefits for their employees.

Additionally, half (51 percent) of these CEOs predict that adopting generative AI will lead to increased company revenue and, consequently, improved profitability.

Read also: Kenya seeks IMF aid to escape money laundering ‘grey list’

Economic Outlook

Despite the growing optimism surrounding AI, a new report by advisory firm PwC reveals that less than half of Chief Executives in East Africa are hopeful about economic growth prospects in the next year.

Only 42 percent of CEOs believe that global economic growth will improve over the next 12 months. While this sentiment is slightly higher than the global average of 38 percent, CEOs in East Africa remain cautious about the medium-term economic challenges ahead.

When asked about growth prospects in external markets, Kenya (26 percent) and China (21 percent) emerged as the most favorable countries for revenue growth prospects over the next one year, according to the PwC report.

Intra-EAC trade has also seen a significant increase, reaching $10 billion in September 2022, up from $7.1 billion in 2019. The regional block aims to further increase intra-EAC trade from 20 percent to 40 percent over the next five years, potentially unlocking future revenue growth opportunities.

CEOs in East Africa identified several factors hindering their companies' ability to create and deliver value. Forty-five percent of respondents highlighted the regulatory environment as a big obstacle, indicating the potential impact of compliance requirements on operational flexibility. Limited financial resources also posed a constraint, with 35 percent of CEOs citing financial challenges as inhibiting factors for their business expansion.

According to Africa's Macroeconomic Performance and Outlook - January 2024, published by the African Development Bank, high inflation continued to constrain performance in African economies in 2023 (global inflation: 6.9 percent; Africa: 17.8 percent; East Africa: 13.8 percent).

This is attributable mainly to the lagging effects of high food and energy prices, agricultural supply shocks, low rates of industrialization, and the weakening of local currencies.

[email protected]