This is a year of recovery, say local industry leaders

Tourists

Tourists enjoying themselves at Bamburi Beach Hotel, Mombasa in this photo taken on November 20, 2021. Both international and local tourism sector have started picking up. 

Photo credit: Jeff Angote | Nation Media Group

What you need to know:

  • Top-level executives expect the economy to reap from huge investments made towards business reforms last year.
  • In 2021 many firms changed or adjusted their operations models in the wake of impacts of Covid-19.

Kenyan captains of industry have exuded confidence that this year carries good tidings for the local economy indicating that recovery, which started last year is expected to be sustained or even improved.

The top-level executives said they expect the economy to reap from huge investments made towards business reforms last year, which saw many firms change or adjust operations models in the wake of impacts of Covid-19.

The executives also hope that rollout of Covid-19 vaccines across the country will continue strengthening the economy, that had plunged to great lows in 2020.

“Looking ahead in 2022, our hope is that the macro environment is conducive for our citizenry and business particularly as we enter the electioneering period,” said Kenya Breweries Limited (KBL) Managing Director John Musunga.

Mr Musunga said the company has huge plans for its customers this year as it marks 100 years of existence.
Agricultural firm Kakuzi, believes that the company will this year enhance its avocado and macadamia production capacity following a Sh100 million investment.

Covid-19 restrictions

“We are delighted that we have made critical headway on the business front. We currently have a thriving new immature avocado development area to boost our production, with output expected to come online in the next few years,” said Kakuzi managing director, Mr Chris Flowers.

Kakuzi was heavily hit by Covid-19 restrictions that lowered its sales in 2020 which saw its net profits fall 12.8 per cent to Sh622.03 million in the financial year 2020 down from Sh713.43 million in 2019.

Kakuzi board chairman Nicholas Ng’ang’a attributed the agro-firm’s lower earnings to an 18 per cent drop in production of its Hass avocado breed as well as oversupply of fruits in the global market which drove down prices. The firm last week issued a profit warning saying its earnings are likely to drop by at least 25 per cent.

“The anticipated drop in full-year earnings is principally as a result of Hass avocado production which is prone to a year of low production after a year of high production. 2021 Hass production was 18 per cent lower than last year,” said Mr Ng’ang’a.

“(It is also as a result of) lower global market prices in our European markets. This is due to an oversupply of fruit from Peru and Columbia which impacted prices during the same period that our fruit was also in the Jmarket,” he said.

Journey to recovery

He said the firm’s poor financial performance was however boosted by strong performance from its macadamia business, validating its diversification into the crop in recent years. 

Executives of at least five organisations in agriculture, manufacturing, education, health and banking indicated that 2022 is expected to record better performance than last year as the journey to recovery towards pre-Covid-19 performance remains on course.

“We successfully managed to integrate diversified educational delivery systems in the year 2021 that will enable USIU-Africa to act as an integrated academic centre. An integrated academic centre that can deliver fulfilling, seamless physical and virtual academic programmes. This was a heavy investment that involved the integration of ICT systems and also human capital training. Undoubtedly, 2022 will be a good year, and we are looking forward to fulfilling experiences for the new intake and continuing students,” said Freida Brown, interim vice chancellor at the United States International University-Africa (USIU- Africa).

Their optimism is also based on the government’s data that the country’s gross domestic product (GDP) grew by 9.9 per cent in the third quarter of 2021, owing to strong recovery in education, accommodation and food serving activities, transportation and storage, manufacturing and insurance sectors.

“The 9.9 per cent real GDP growth is testament that the economy is recovering from the effects of the Covid-19 pandemic, and that the government’s interventions are working for the good of our people,” said Treasury CS Ukur Yatani December.

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