East Africa business environment temperature check

East African economies are currently facing a period of subdued growth with investors navigating a credit crunch. Despite these challenges, Sandeep Madan, CEO of The Partnership Africa, remains optimistic about the region's investment climate. With a young population ready to consume products and services, the potential for growth in East Africa is significant for the next couple of decades. Governments are focusing on building manufacturing capacity and promoting intra-Africa trade to reduce dependency on foreign exchange issues. However, rising costs of living and uncertainty around investments in the era of AI present challenges. Madan encourages a positive outlook, believing that opportunities outweigh the obstacles. In terms of consumer power, households are feeling the pinch, leading to challenges for small and medium enterprises (SMEs). Some companies may scale down production, but history has shown that those who continue to invest during economic hardships tend to thrive in the long term. Financial institutions in Kenya and Tanzania are actively supporting SMEs to navigate the liquidity crunch. Madan points to success stories like Safaricom and Equity Bank in Kenya, which invested during tough times and emerged as top brands in the region. Looking ahead, Madan sees growth potential in the short and medium term, with massive opportunities in the long term. The key to success lies in close alignment with core business operations, investing in talent, capacity building, and expanding into multiple markets. The Partnership Africa is poised to undertake a significant project in sub-Saharan Africa, showcasing their ability to deliver across the continent. Overall, Madan remains upbeat about the future of the business environment in East Africa, emphasizing the importance of optimism and proactive investment strategies.