Africa’s CEOs look to innovation and technology to stimulate growth
In Africa’s boardrooms growth is on the agenda – together with addressing stakeholders’ expectations and concerns and managing the pipeline of talent. Business strategies of companies include the growing of regional operations, investing in and developing innovative and technological products and services, and strengthening of internal management structures. These are some of the key highlights of PwC’s Africa Business Agenda 2016 survey released at the 26th World Economic Forum on Africa in Kigali today.
The African Business Agenda compiles results from 260 CEOs and includes insights from business and public sector leaders from 18 African countries.
Hein Boegman, CEO for PwC Africa, says: “CEOs in Africa are ramping up their efforts to innovate and find new ways to do business on the continent in a move to stimulate growth in a challenging and uncertain global business environment.
“The global financial and economic crisis has revealed Africa’s vulnerability to a number of external economic shocks. Notwithstanding a multitude of challenges, many of which are cyclical, we remain confident that Africa’s prospects remain positive.”
Anne Eriksson, Country and Regional Senior Partner for PwC in Kenya and East Africa, says: “East Africa is in a good place now in terms of demographics and relative political stability. The region is seen as a good destination to invest, whether for multinationals or venture capital or private equity funds.
‘We have seen a multitude of organisations expand significantly in East Africa – what continues to be a challenge for most of them is ensuring that they can meet demand and so achieve their shareholders’ objectives, and at the same time maintain high standards of quality.”
According to The Agenda, just over a quarter of CEOs in Africa believe global growth will improve in the next 12 months. African CEOs are less optimistic about global prospects than a year ago, with 66% of CEOs (Global: 73%) thinking the economy will not improve in the next 12 months, while 92% (Global: 73%) are ‘extremely concerned’ about exchange rate volatility.
Catalysts for growth
After more than a decade of urbanisation, Africa is poised for a digital revolution. Increasingly, organisations are using technology to challenge business models and disrupt competitors in markets. African CEOs that took part in the survey are cognisant of emerging technologies that can transform their businesses in the next five years.
Going forward, African CEOs indicated that they will be more actively looking for partners, while keeping an eye on costs. Partnerships and alliances feature prominently in their plans, with more than half of CEOs (56%) planning to enter into a strategic alliance over the next 12 months.
The corporate landscape continues to undergo constant change, with companies being confronted by shareholders and other institutional investors who demand explanations around financial reporting and performance. In the process, businesses are encountering a range of challenges in responding to stakeholder expectations.
Trust is emerging as an important differentiator in the business community. Building trust helps organisations to attract investment and build stakeholder loyalty. It is concerning to note that 65% of African CEOs are somewhat or extremely concerned about the lack of trust in business (Global: 55%). Corruption is also seen as a major threat by businesses (86%).
“Africa is a complex and diverse continent requiring layers of insight. Growth in Africa is taking place in individual markets and geographic regions, within industry sectors and influenced by demographic changes. Notwithstanding the difficulties and challenges that lie ahead, many organisations in Africa have learnt to adapt and be agile to respond and overcome many of these challenges in order to achieve their organisational goals,” concludes Eriksson.