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Executives are concerned about staff skills and external threats, but business confidence is high.
Africa’s business executives entered this year with a mix of optimism and uncertainty. At the World Economic Forum in Davos this January, PwC released its Global CEO Survey for 2015. The outlook, according to 1,322 of the world’s top chief executives in 77 countries, is that confidence in business growth prospects is as high as last year, but concern about business risks and the global economy is rising. We look at the report from an African perspective.
External factors worry African CEOs
Many of the 54 nations that make up Africa present huge business opportunities but also significant hurdles. Business leaders in Africa are more concerned than CEOs in other regions about a wide variety of influencing factors. PwC’s report lists a range of threats – social instability, inadequate infrastructure, access to key skills, energy costs, and bribery and corruption. In South Africa 88 percent of CEOs cited high unemployment or underemployment as a top economic or policy threat, compared to 49 percent of CEOs globally.
Concern over these diverse external threats is generally higher in Africa. However, economic growth projections show that despite the issues, the continent is a great place to invest in 2015. GDP growth in Sub-Saharan Africa picked up to 4.5 percent in 2014, ahead of the global average of 2.6 percent, and is set to rise to 4.6 percent in 2015, compared to a global average of 3 percent.
Availability of key skills is a global concern, and this is an issue that particularly affects African job-seekers and business leaders.
Skills take precedence
Out of all CEOs surveyed, 81 percent say they are looking for staff with a wider range of skills than ever before. Availability of key skills is a global concern, and this is an issue that particularly affects African job-seekers and business leaders. African Economic Outlook (AEO) surveyed experts in 36 countries in 2012, and found that poor education systems and a lack of links between schools and private sector employers created a skills deficit.
According to the AEO survey, “54 percent [of respondents] found a mismatch of skills between what job seekers have to offer and what employers require to be a major obstacle.” A key statement in that study: “African universities do not educate for African needs.” However, the system works in some areas better than others. Employers in some of the fastest growing sectors – banking, IT and telecoms – are finding the fewest problems recruiting great candidates.
Technology favors the nimble
New technologies play well to African entrepreneurship. “Technology is eroding the minimum requirements needed for a firm to exist,” states the PwC report. “Today’s nimblest competitors are ‘lighter’ firms with simpler value propositions, a tighter set of core competencies and fewer assets.” The advantages are clear for African start-ups and firms that are challenged by the lack of brick and mortar infrastructure. Digital investment brings its own dividends but it also creates a platform for cross-border collaboration, the lack of which has previously hampered African growth.
The continent has seen an explosion in digital infrastructure development and personal connectivity in recent years. Initiatives such as Orange Digital Ventures and the Rockefeller Foundation’s Digital Jobs Africa further promote the idea that uptake and development of the newest technologies is changing Africa’s consumer experience and job markets for the better.
Good leaders are curious
“More than anything,” said the PwC report, “the CEOs we talked to this year stressed the ‘soft’ skills of leadership.” Vision, flexibility in making decisions, and a sense of curiosity about the business world, count for a lot. An interest in changing with the times and technology, and a desire to do so, are crucial. Africa’s current generation of executives shows a passion and talent for leadership that will be a primary driver for commercial and social development this year and beyond.