BrazilCEOs in Africa are bracing themselves for a challenging year
Morale appears to be down in the business environment across Africa, as indicated by PwC in its latest Africa Business Agenda. CEOs across the continent lack confidence in the future of the global economy, as well as in the growth of their own businesses in the current environment.
The Africa Business Agenda draws on the African responses to PwC’s Global CEO Survey for this year, which drew responses from nearly 1,400 CEOs in 91 countries. Africa’s representation in the survey amounts to 83 CEOs from 19 different countries across the continent.
The annual surveys have revealed ups and downs in global sentiment in recent years. Where CEO sentiment was high over the last two years, concerns around the future openness and stability of the global economy are putting a dampener on CEO sentiment in various corners of the world.
In Africa, 25% of PwC’s respondents predicted a decline in the global economy over the next year, which is expected to have an impact on their own operations. This is evident from the fact that only 27% of African CEOs surveyed believe that their own organisations will register strong revenue growth in the next three years.
On the other hand, more CEOs believe in their growth prospects over the next three years, which reflects either a sense of confidence that the global economy will recover in the medium term, or confidence in their own organisations to navigate the increasing challenges over a longer period.
PwC’s report comes amid broader introspection among African economies, as the World Economic Forum (WEF) in Africa kicks off in Cape Town this week. Leaders from the continent’s political and business environments are coming together to discuss some of the challenges currently facing the continental economy, and devise the best way forward.
Some responses to PwC’s report are useful to gauge the general overview of concerns amongst business leaders. The Big Four accounting and advisory firm reports that concerns have shifted in recent years from ‘existential’ challenges such as climate change and terrorism, to more immediate challenges.
Most CEOs, for instance, are troubled by the prevalent ‘policy uncertainty’ in many national and international economies, as governments look to navigate an increasingly hostile economic environment. The second biggest concern, meanwhile, is over-regulation, which is born out of the need to control the digital paradigm as well as to rein in the increasing problem of corruption and malpractice.
Other causes for concern that most CEOs have in common include exchange rate volatility, increasing tax burdens, uncertain economic growth, and overall social instability. Under these wobbly circumstances, PwC recommends a set of practices that will help organisations navigate a turbulent period.
The firm has put forth four broad steps that need to be taken to help tackle current challenges. Firstly, businesses must prioritise the issues that they address, giving precedence to issues that align with the overall organisational brand and eliminating irrelevant subject matter.
Secondly, the firm calls for clear and frequent communication between the business sector and the government, to ensure alignment between the regulatory environment and business objectives. The third recommendation is to develop skills that are most relevant to the contemporary organisation, which include digital and innovative capabilities.
Lastly, the firm recommends highlights how each individual business can alter its practices to tackle some of the issues that are plaguing the global economy. “Business has an essential role to play in building and fostering trust in society and CEOs should embrace the responsibilities and opportunities this brings,” states the report.
