Most African business leaders are more optimistic about the strength of the global economy and their organisations’ abilities to grow revenues in the next 12 months than they were a year ago as they navigate the disruption of the Covid-19 pandemic, according to PricewaterhouseCoopers’ (PwC’s) Africa Business Agenda 2021 Report launched recently.
A year ago, only 20 percent of chief executives in Africa expected improved growth, but this had rebounded significantly to 68 percent. However, despite renewed confidence in their own companies’ revenue prospects, these leaders were still anxious, as policy uncertainty, tax policy, cyber-threats and over-regulation were keeping them awake at night, the survey found.
The Africa Business Agenda draws on the results of PwC’s 24th Annual Global CEO Survey of 1 779 interviews in 100 countries, including 50 chief executives from 14 African countries.
Vaccine roll-outs by nations and the speed at which they proceeded were key to growth, the report found. Markets in the past few month have also seen investor sentiment focused on this.
So although chief executives in many countries contemplate vaccine roll-outs and look forward to the resumption of some form of “business as usual”, those in Africa were a lot more guarded.
“This is reflected in our survey findings where 30 percent of African chief executives are very confident about their companies’ growth prospects in the next 12 months, compared to 36 percent of global chief executives. There is, however, a notable improvement in optimism over the medium term, with 42 percent of chief executives in Africa saying they are very confident about their revenue growth prospects over the next three years.”
Dion Shango, the chief executive for PwC Africa, said: “In Africa, economic and policy uncertainty, among other issues, have cast some doubt upon business leaders’ hopes for their own companies’ immediate growth prospects. Although there is a drop in optimism over the short term, African business leaders do see some opportunities on the continent – but overall they are playing it safe.
“The reasons for this gap in confidence vary from African countries still being at an earlier stage of the pandemic life cycle to uncertainty about governments’ Covid-19 response and policy direction in its aftermath,” Shango said.
Chief executives in Africa, at 60 percent, were more concerned about the perennial challenges of policy uncertainty than their global peers (38 percent), tax uncertainty (Africa: 56 percent, global: 31 percent), over-regulation (Africa: 48 percent, global: 42 percent) and the fast-evolving reality of cyber-threats (Africa: 54 percent, global: 47 percent).
Shirley Machaba, the chief executive of PwC Southern Africa, said: “Overall, the sheer magnitude of concern about most threats has increased since our 2020 survey, despite chief executives’ rise in confidence. Among them in Africa, navigating these perils is a permanent state of being, which conflicts with their inherent optimism. Navigating this tension is a perennial leadership challenge that currently seems to be particularly acute.”
In driving business growth in Africa, 64 percent of chief executives were pursuing organic growth, compared to 73 percent globally, while 78 percent of African leaders were seeking operational efficiencies, compared with 77 percent of their global peers.
The survey found that more than 52 percent of chief executives in Africa, compared with 49 percent of their global peers, planned to increase their long-term investments in digital transformation significantly.