In the second annual Africa CEO survey, 95 per cent of African CEOs said that they experienced negative effects on their revenues and operations due to the COVID19 crisis.
Africa CEO Forum introduced a survey of 150 CEO providing insights on the climate, situation, and outlook of the African private sector. The survey focused on six areas; strategy, governance, financing, innovation, impact, and talent.
COVID19 impact on business outlook
Prior to the pandemic, more than 80% of African private sector leaders felt optimistic about the economic prosperity of their countries in 2020. The sudden onset of the COVID19 crisis saw business activity plummet majorly hurting the CEOs confidence in the economy.
Since COVID19 struck, the outlook reversed and 75% of respondents currently feel pessimistic about 2020. Leaders in the consumer business, financial services, and energy sectors were the most optimistic prior to the pandemic but are now the most concerned about the future.
Business leaders are increasingly confident about the continent’s long-term growth outlook but are facing new challenges in the short term due to the Covid-19 health crisis. The slowdown in global economic growth will have a negative impact on operations.
Factors driving CEOs confidence
Across all sectors, survey respondents exhibited a high degree of confidence about Africa’s long-term outlook with 60 percent confident that business will return to normal in 2021. The leaders cited the emergency measures implemented during the crisis to have long-term positive benefits.
The COVID19 crisis accelerated the importance of digital technology in improving quality of life and modernizing the economy. Respondents were pleased about the current and future developments in terms of digitalization.
Digitalization is happening in four areas.
Business digitalization saw implementation of IT tools and solutions reinforcing teleworking. Employees were provided with hardware; laptops, prepaid internet devices, with new solutions; conferencing tools such as Microsoft teams, VPN programs rolled out.
According to 81% of African leaders, digital transformation will be an essential component of their strategy in the next 12 months. 60% are aware of the strong impact innovation has on their competitiveness.
Government digitalization including public services; health, social welfare, safety, finance, and trade as public officials and agencies became aware of bureaucratic hurdles. Public authorities have relied on digital technology to smooth out administrative processes.
However, relationships with authorities remain a point of contention and African CEOs continuously expect improvement from their governments. In this case, 39 percent of the respondents feel that private sector recommendations continue to be inadequately taken into account by public authorities.
Digitalization of the economy is occurring through e-commerce, supply chains, foreign trade, and custom procedures, tax returns
African private sector leaders noted structuring of the innovation ecosystem via backing investment funds to encourage the development of champions
The CEOs confidence in economic recovery has been boosted by their hopes in the continent’s further economic integration through the single continental market initiative (AfCFTA). Political conditions on the continent improved in many countries driven by new elections, peaceful political transition with African governments reinforcing the need for cooperation and standardization at the continental level.
Kenya among most attractive for investment
According to survey results, Côte d’Ivoire, Kenya, Ghana, Senegal, and Rwanda are the most attractive countries for investment in 2020.
The Africa Investment Attractiveness Index is based on the responses of African business leaders to the following question: “Which African countries do you find to be the most attractive for investment at the present time?”
Others in the top ten include; Ethiopia, Nigeria, Morocco, DRC, and South Africa.