The AFRICA CEO FORUM and Deloitte have published a survey to better understand the African private sector. More than 120 company directors from all over the continent took part.
According to the findings of the Africa CEOs Survey 2019, confidence in the continent’s economic dynamism is high among business leaders (73% of the CEOs surveyed). This level is supported both by the creation of the Continental Free Trade Area (AfCFTA, 81% of the CEOs surveyed view it positively, although decision-makers would like more clarity on the subject) and by managers’ ability to establish clear strategies and their willingness to extend their activities beyond their own borders.
As a sign of this optimism, one-third of the respondents plan to open up their company’s capital. As many as 43% of them are considering doing so with a foreign entity or investment fund.
However, the CEOs questioned noted several obstacles to the growth of their businesses, to which none of them had been able to find a solution. Among these, the business environment is in first place (31%), followed by difficulties in recruiting (17%).
Financing and recruitment
The challenges of financing growth also figures among the difficulties mentioned (16%). The survey reveals that 53% of SME-SMI entrepreneurs – who are numerous and vital for the continent – rely on their own resources to develop, while only one-quarter have been able to obtain a bank loan. A few signs of improvement are evident, however: 19% of the CEOs feel positive about this matter, perhaps because of the competitive, attractive and innovative services developed by a growing number of pan-African banks.
Only one-quarter of SME-SMI entrepreneurs were able to obtain a bank loan
On the training side, school systems, though improving, are still considered disconnected from the needs of business. While CEOs seem able to find their top management, they regret the narrow market for middle managers. In this context, human resources directors play an essential role, particularly in the replacement and development of employees, including future managers.
Flexibility and diversification
To limit the risks, the CEOs surveyed ultimately recommend flexibility and diversification in order to face up to the uncertainties in the business environment, as well as weaknesses in the size of their markets (12% see this as an obstacle) and dependence on a single segment. But, paradoxically, they have not fully made use of the digital revolutions: while 50% of those surveyed have integrated mobile applications into their daily activities, only 10% have explored innovations from artificial intelligence. In the end, more investment is needed to accelerate progress in this field and avoid being left behind.
Côte d’Ivoire, the primary focus for investment by major African CEOs
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