Inflation tops the list of threats for top Chief Executive Officers (CEOs) in Tanzania as 45% belive their companies will be highly exposed and a further 38% believing their companies will moderately exposed, a recent survey by consultancy firm PricewaterhouseCoopers (PwC) shows.
In addition, more than half the CEOs rank macroeconomic volatility as well as cyber risks as either highly exposed or moderately exposed.
“In the medium term, inflation and macroeconomic volatility continue to be seen as a continuing significant threat, and the perception of threat arising from climate change and cyber risks is seen to increase,” according to the PwC report.
The challenge of rising inflation and macroeconomic volatility is mentioned in the recent IMF press release which notes that “inflation is expected to surpass the BoT’s5 target and reach about 5.3 percent by the end of the current fiscal year” and that “the current account deficit is projected to remain elevated in 2023 amid the uncertain global environment”.
Economic challenges and volatility
The top three mitigation responses of Tanzania CEOs to potential economic challenges and volatility are to reduce operating costs for the next 12 months (63%), diversifying product or service offerings (46%), and reevaluating ongoing projects or major initiatives for their businesses (44%).
In addition, the majority of CEOs are collaborating with the government at national or local level to create new sources of value as a method to mitigate against economic volatility. Moreover, 37% of the CEOs are in collaboration with other established companies/ competitors and and 27% of them are collaborating with industry consortia.