Operational risks are more of a challenge than digitalisation in East Africa

While CEO’s in East Africa share the optimism of CEOs across the world, their concerns are vastly different from their global counterparts, according to a new report from Big Four accounting and advisory firm KPMG. Most are concerned with developing resilience within their own organisation.

East Africa is among the most rapidly developing regions on the African continent. This economic growth stems from political stability in the region, which has also drawn a wealth of foreign investment. As a result, the region has become a major economic centre, connecting the continental economy to various parts of the world.

However, executives in the region appear to be grappling with challenges that are different from their global counterparts. While CEOs across the globe appear to be occupied with tackling digital disruption and devising strategies to optimise their operations, CEOs in East Africa are looking to build resilience.

KPMG’s new report on the CEO outlook in East Africa illustrates this sentiment. When asked about the biggest risks to their operations, The biggest share of CEOs in East Africa appeared to be concerned with operational risk, which contrasts with global concerns around climate change. 

Therefore, businesses in the region are looking to strengthen their operations and make them more reliable, which is their primary focus. Nevertheless, the digital wave has hit Africa just as hard as other regions, driven by the rapid expansion in the number of internet users on the continent.

Businesses are feeding this online customer base by digitalising their operations, which brings with it a number of new risks. As a result, the next biggest area of focus amongst East African CEOs is cybersecurity. Businesses across the region are investing in their cybersecurity capabilities.

While executives in the region were previously concerned about their operations being disrupted by digital technologies, this emerged as the least prominent area of concern in the contemporary environment. Other priorities amongst these businesses appear to display promising signs.

The report illustrates how most executives in East Africa agree that the welfare of their organisation depends on their compliance with the increasingly stringent global standards of clean technology and low carbon output, despite seeing climate change as a minor threat to their operations.

Most executives also agree on the importance of innovation in their organisational growth, which is reflective of the sentiment across the African continent. This sentiment is exemplified by the fact that a number of CEOs feel that disruption of business norms is crucial to growth.