The report released by PricewaterhouseCoopers (PwC) showed that growth opportunities are unprecedented in Africa, leading to higher CEO confidence than ever before.
There is significant potential for the East African region to rise as a major energy bloc with the recent discovery of oil in Northern Kenya, offshore gas fields in Tanzania and Uganda’s oil reserves in the Lake Albert basin.
Among CEOs, strategies to leverage the expected growth include maturing regional operations, developing innovative products and services and strengthening internal management structures.
Over 70 percent of CEOs say that economic uncertainty, exchange rate volatility, inflation, energy costs and an increasing tax burden are threats to growth, though to some extent, these threats are ones that CEOs have learned to live with.
Managing risk is one of many responsibilities for CEOs in Africa, but more than half of them (54 percent) wish that they had more time to spend on it, while 81 percent of CEOs anticipate changes to their approach to managing risk this year.
In Kenya, 60 percent of CEOs say that inadequate infrastructure is a threat to growth, but exchange rates and energy costs have affected the Ministry of Roads’ ability to buy bitumen or diesel to build new roads, according to Roads Permanent Secretary Michael Kamau.
In the report Ceasar Mwangi, Managing Director of Sasini Limited, was concerned about the huge potential for agriculture in the country that is being threatened by the lack of infrastructure in turn preventing local produce from reaching the local people who want and need it.
“We’ve got farms which can produce but we cannot get the produce out. And these are issues which somehow we’ve been saying, ‘ok, we can live with them’ but we need to do something about them,” he explained.
When it came to skills in the labour force, 85 percent of CEOs say that they anticipate changes to their talent management strategies over the next year and 75 percent say that the availability of key skills is a risk to growth.
“In Kenya, the competitive environment is changing rapidly. CEOs say that a growing culture of innovation, strategies to support growth and broader economic trends are impacting their companies and influencing their government. CEOs are focused on building the talent pipeline to really maximise the potential of their people. This mindset is also influencing retention,” Anne Eriksson, PwC Kenya Partner said.
Many CEOs in Africa said that universities simply can’t keep up, either because technology is changing too rapidly or because universities don’t teach students to apply a commercial mindset to innovative ideas.
The report suggested that this could be the legacy of an outdated reliance on certificates rather than experience, which is what is needed in the market.
This trend took a toll, with 54 percent of the CEOs saying that talent-related expenses rose more than expected over the last 12 months and many complain anecdotally about poaching and poorly-trained and inexperienced managers.
The report surveyed over 200 business leaders from Angola, Ghana, Kenya, Mauritius, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia.