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African CEOs express optimism for growth despite economic uncertainty

03 May 2017
Financial Nigeria

Summary

The PwC research shows that one of the reasons African CEOs are positive is they tend to look to the upside and seize on the opportunities uncertainty brings.

Sola David-Borha, Chief Executive, Africa, Standard Bank Group

The latest survey of CEOs in Africa conducted by PricewaterhouseCoopers, the global professional services provider, has shown that 91% of CEOs are confident about their own companies’ growth prospects in the medium term. CEO for PwC Africa, Hein Boegman, revealed this finding while speaking on the challenges and opportunities facing Africa’s CEOs at a press briefing today during the World Economic Forum on Africa 2017, scheduled to take place in Durban from 3-5 May.

“This is the highest level of confidence since we started our research on CEOs in Africa in 2012,” said Boegman.

The PwC research also shows that one of the reasons African CEOs are positive, despite the current economic uncertainty on the continent, is they tend to look to the upside and seize on the opportunities uncertainty brings.

PwC said the current global environment is difficult to read, especially given the uncertain prospect of Brexit as the United Kingdom prepares to leave the European Union, and the unfolding policies of Donald Trump in the United States. Another case in point is the recent political and policy uncertainty in South Africa, and the recent downgrade of the country’s sovereign debt to junk status.

Nigeria, Africa's largest economy, is still in the grip of a recession. Exchange rate volatility, an increasing tax burden, social instability resulting from inequality, and corruption remain problems in many countries.

“It is no longer enough for business leaders to steer their organisations through a complicated and challenging environment – they will need to adapt swiftly to change,” said Dion Shango, CEO for PwC Southern Africa.

Anne Eriksson, Regional Senior Partner for PwC in East Africa, added that “Regulatory policy can also restrain growth, and in some cases, necessitate cost reduction by the businesses affected.”

PwC said CEOs will need to focus on their business strategies and processes and they will be expected to play a part in the broader community. Eriksson points out that regulatory change in Kenya has helped the country’s financial services sector to pay more attention to its customers. A number of multinational companies have also committed to building capacity and improving transparency and regulatory frameworks through engagement with government.

“The returns for doing business on the continent are high, but so are the risks,” Boegman noted. “Africa’s CEOs are operating in difficult times – infrastructure on the continent remains a challenge, finding and retaining the right talent for their businesses, dealing with many of the hurdles that come with working with governments, and managing growth plans across the continent.”

Notwithstanding the challenges and slowdown, PwC said Africa is also experiencing a number of advances economically and socially. The professional services provider noted there are significant trends that could offer new opportunities and benefits for businesses, governments and the population. Trends such as demographic change, increase in urbanisation, shifts in global economic power and technological innovation are seen to be favourable to development on the continent. Across all sectors, the pace of innovation in Africa is driving greater collaboration and convergence.

"Africa’s CEOs will need to overcome a number of challenges to truly transform their organisations. In the process, business needs to recognise and manage its responsibilities and dependencies,” Boegman said.


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