Middle East CEOs eye Egypt and Iraq as important growth markets

Middle East CEOs are now looking to Egypt and Iraq for growth opportunities according to the regional findings of PwC’s annual global survey.

Following up from the annual global CEO survey unveiled by PwC at last month’s World Economic Forum summit in Davos, which recorded a sharp rise in pessimistic growth sentiment among business leaders worldwide, the Big Four firm has now released its regional Middle East findings – with local executives looking toward their lesser tapped neighbours for fresh growth opportunities.

Conducted among nearly 1,400 CEOs in 90 territories worldwide, this year’s 22nd annual PwC CEO survey found business pessimism to be rife across the planet – with Middle Eastern CEOs the gloomiest of the lot, at 38 percent compared the global average of 29 percent. The Middle East also had the lowest share of optimistic CEOs, with geopolitical uncertainty weighing heavily on local minds.

One result of these negative local growth expectations appears to be regional business leaders looking closer to home for new growth opportunities, with Egypt emerging as a key international growth market for local organisations, behind only the Kingdom of Saudi Arabia. Split by just India, Iraq was also cited as one of the top five-most important growth markets, ahead of the US, UK and China.  

“It was interesting in this year’s CEO survey that CEOs are looking closer to home for growth,” PwC Middle East’s Clients & Markets leader Stephen Anderson told Zawya. “Our CEOs are cautiously optimistic that stability is returning to Egypt, the economy grew at 5 percent last year and we predict GDP growth next year of over 5 percent making it one of the fastest growing economies in the region.”

Altogether, 15 percent of respondents cited Egypt as one of their three most important territories for growth prospects in the coming year. Anderson continued: “Egypt is obviously a huge potential market, particularly in the consumer sector, with a population of just under 100 million projected to reach 140 million by 2050, but has been blighted by insecurity and the devaluation of the Egyptian pound in recent times.”

While reforms in Egypt have returned the country to the list of important foreign markets, Saudi Arabia undoubtedly remains at the top, capturing 26 percent of the vote – “Our CEOs can see the transformation that Vision 2030 is having on the country and know that to be successful in the region, you have to be successful,” states the report. Following the KSA and Egypt, was India, at 13 percent, and Iraq at 10 percent.

Elsewhere, the area where Middle East responses stood out most in terms divergence from global averages was in staffing – with a massive 43 percent of Middle East CEOs expecting their organisation’s headcount to decrease in the coming year, against just 19 percent globally. The number expecting local headcounts to grow meanwhile – likewise 43 percent – was also well below the global average of 54 percent.