Businesses across Africa are prepared to invest in digitalisation

Despite facing a number of additional barriers to economic transformation, private business leaders in Africa appear to be more open to digital transformation than leaders in Europe, according to new analysis from Big Four accounting and advisory firm PwC. More than 80% of private business leaders see digitalisation as a crucial part of the future.

PwC’s analysis is based on a survey with private business leaders across nine economic centres in Africa, which sought to determine the overall outlook when it comes to digitalisation. The results have been contextualised in relation to similar surveys conducted in other regions across the globe.

So far, perceptions amongst experts and market watchers have indicated that businesses in Africa are not willing or prepared to digitalise their operations to remain globally competitive. Surveys have revealed that other priorities still supersede investment in technology for businesses in some key financial centres across Africa.

Some of Africa’s largest economies – Nigeria, South Africa, Kenya and others – have been deemed underprepared when it comes to global standards of digitalisation. PwC’s latest survey amongst private business appears to indicate a change in this scenario for the better, particularly in relation to other economies.

Where 65% of private businesses in the European Union (EU) have labeled digitalisation as ‘highly relevant’ for their future development, the figure stands at 81% for African businesses. Further, more businesses in Africa are willing to earmark more than 5% of their planned investment to digital advancement than anywhere else.

This is despite the fact that economies in Africa lack the same level of enabling infrastructure for digital transformation that other regions are equipped with. Nevertheless, African businesses are determined to invest in digital, and are equally certain of the fact that it will pay dividends.

PwC reports that 83% of African private businesses expect revenues to grow over the next year, while the same figure stands at 58% for the EU. The optimism across Africa is particularly striking in light of the economic stagnation being experienced by the largest two economies on the continent – South Africa and Nigeria.

However, the professional services firm highlights the importance of translating this optimism into concrete development. Digitalisation is a multifold process, and one of the fundamental areas that requires investment is the development of digital skills across the business environment.

Once digital talent is developed within an organisation, it can focus on some of the key technological areas that are most likely to boost business growth. Some fields within the digital sphere even hold more relevance within the African context than across the EU.

In order to make sense of the broad array of technologies, PwC has classified the ‘Essential Eight’ technologies that will be the most relevant for businesses over the next three to five years. “The Essential Eight are the technology building blocks that every organisation must consider,” states the report. 

The Esssential Eight consists of Internet of Things (IoT), blockchain, artificial intelligence (AI), 3D printing, augmented reality, virtual reality, drones and robotics, all of which will have a significant impact in the near future. However, none of these is likely to have a tangible effect in isolation.

“their real value is unlocked when they converge. While each company’s strategy for how to best exploit and combine them
with other technologies will vary, it is these essential eight technologies that will transform an organisation,” explains the report.