Findings of the PwC Kenya 2024 CEO Survey have suggested that 86 percent of Kenyan business leaders are looking at investments in regional markets as the main driver of revenue growth. The CEOs are also looking at adopting generative artificial intelligence technologies to enhance operational efficiency. Peter Ngahu, regional senior partner for PricewaterhouseCoopers (PwC), spoke with the Business Daily on insights the CEOs shared.
Why are Kenyan CEOs looking at EAC and other neighbouring countries for investment opportunities to grow revenue?
The survey gives us indicators, but we talk to the CEOs on an ongoing basis as we interact and serve them. There is no question beyond the survey that the region is where they are looking for growth. Whether that is banking, insurance, or manufacturing; you can see Kenyan companies expanding into the region. The CEOs are very clear that Kenya is the gateway to a wider market and that market is not just the East African Community as we know it. With the recent addition of DRC, it has become a very attractive market, especially for the financial services sector. The CEOs have placed a high premium on the region as a source of growth for the future. And it is very difficult to see any Kenyan company that is significant in scale that is not already out in terms of footprint from the Kenyan market.
What type of investment are they mostly using to enter those markets?
Some are going and setting up greenfield operations, but a lot of them are identifying organisations they believe are aligned with their strategy and then seeking to acquire them. And some have done that [mergers and acquisitions] with quite some success, while others have set up greenfield operations and that takes time.
At what point should a firm abandon the brand of the company it has acquired and introduce its own identity in a new market?
One has to look at the prevailing conditions. Things like how strong the brand that you are acquiring is. Initially, what we tend to see is that even when you have an acquisition you might find company X in a particular country is left to maintain that brand for some time as they try and introduce the brand of the acquiring company in that market. That is mainly to ensure that the change is gradual and not disruptive because people get attached to a brand. So, if it is a local brand and they are attached to it, you don’t just take that away.
Does that also apply to a multinational whose brand is well known in the market it has made an acquisition?
For multinationals, there’s a lot of value in ensuring uniformity of your brand across markets. Otherwise, it would create confusion. Local circumstances will dictate how strong that brand is in that local market will inform how quickly you transition into a unifying brand.
How are business leaders managing different regulatory regimes in regional markets. Why is regulation top of mind of the CEOs?
Regulation is top of mind of the CEOs. I think it is a never-ending issue for businesses in Africa in general and is creating some level of uncertainty. And one can understand because if you are operating regionally, we are not truly one custom union despite being in the EAC bloc. Take tax policy, for example. In a lot of our countries in the region, predicting what the tax regime is going to be 24 or even 12 months has become difficult.
The uncertainty around regulation and the volatility around it in terms of what the government is going to do tomorrow and ‘How do I prepare for next year from a regulatory standpoint’ has always been on top of the minds of the CEOs in this region.
Disruptive technology such as generative artificial intelligence also continues to be a headache for CEOs. How are they adopting AI in their operations?
CEOs are increasingly recognising the value that AI is bringing to their organisations. But a lot of organisations that we surveyed are also lagging in the adoption of AI. However, they recognise the potential of AI in terms of enabling them to create the value they are looking for. We believe as PwC that it [AI] is going to be the most significant technological change after the invention of the mobile phone in terms of its transformative impact.
That view is shared with a lot of CEOs from our conversations with them. It is early days but most of them recognise its potential and power to disrupt their businesses. The sooner they adopt and prepare for the future, the better.
How is AI affecting jobs, especially for PwC?
What AI has done and will continue to do is demand different types of skills and training of the people we bring in. This is because technology has transformed the way we work and live. So when we look for individuals to train and recruit, the training I received when I joined the firm cannot be the same training we give to those people because they have to work with different technologies.
So AI is not limiting the number of opportunities, it is enabling us to do more for our clients hopefully at a lower cost so that we can be more efficient. Even if we deploy AI, we still need human intelligence to interpret data. We still need the human touch with different skills and training.
You joined as a management trainee and you have risen to the apex. What is your management philosophy?
You need to empower teams to the lowest level so that people feel they have a responsibility and say ‘It’s up to me as an individual and I need to do it because it is important’. Not because Peter has said. Teamwork wins all the time. If you look after your teams and your teams succeed, you have succeeded yourself.
How do you empower your teams?
My style is that let’s agree on what needs to be done, and what support you need from me and then get on with it. If we brought you into PwC you must know what you are doing. Instead of second-guessing what people are doing, you need to set a clear direction on what your expectations are, agree on what needs to be done, empower them and then get out of the way of the teams so that they can get on with it. So I like to delegate and empower teams to do what needs to be done. Some of them are experts in their fields and I am not. They just need my support and direction to thrive. That has worked for me.
