African CEOs want growth potential unlocked

DESPITE the current economic climate and other challenges, there is notable optimism among African business leaders about the potential to unlock growth on the continent, a PricewaterhouseCoopers (PwC) report released on Wednesday showed.

Titled Africa Business Agenda 2019, the report was compiled by London-based PwC, and states that from the survey they conducted, over 90% of African chief executive officers (CEOs) are “somewhat confident” or “very confident” about their organisations’ prospects for revenue growth over the next three years, higher than the global average of 85%.

The report was launched at the biannual World Economic Forum (WEF) on Africa in Cape Town, and provides an analysis into how businesses are adapting to meet the challenges of operating in Africa.

African CEOs identified operational efficiencies, organic growth, and the launch of a new product and service as their primary drivers of revenue growth.

“Faced with uncertainty around current markets, African CEOs are turning inward to drive revenue growth”, the report read.

While the United States, China and the United Kingdom continue to be the most dominant traditional markets for growth opportunities, it is notable that 20% of African CEOs “don’t know” where else to look for growth, and 5% say there is “no other country” they would look to, while only 36% said they would enter a new market in pursuit of revenue growth.

The report also found that trade conflicts and protectionism do not make the top 10 list of concerns in Africa, but rather a few countries in Africa stand to benefit from trade tensions elsewhere.

“While some of these issues present barriers to business and trade, there are also fresh prospects for revenue growth because of new trade arrangements. As the rest of the world is embroiled in trade conflicts, African countries are looking at opening their markets to trade, with the African continental free trade agreement as the centre of this activity,” the report stated.

Generally, African countries do not trade much with each other, with intra-continental trade only about 3% of global trade.

The low trade figure is due to several issues, namely poor infrastructure on the continent, high tariffs on imports, bureaucracy and red tape, and problems at border posts.

“To boost economic growth on the continent, it is vital that African countries improve trading with each other, and invest in infrastructure to drive trade,” said Dion Shango, CEO for PwC Africa.

As social, political and economic events shift the boardroom, African CEOs need to step forward to make meaningful contributions and rebuild confidence for the long term, he noted.

“Business has an essential role to play in building and fostering trust in society, and CEOs should embrace the responsibilities and trust this brings,” Shango added.

– Nampa-Xinhua