For businesses to stay competitive, they need to address current obstacles while simultaneously looking to the challenges and opportunities of the future. This is a balancing act many leaders in Africa are familiar with, according to a new report from PwC.
In response to inflation and challenging economic conditions, CEOs in Africa said their top concerns were reducing costs (91%), diversifying products (90%), and increasing prices (74%), according to the report, Africa Business Agenda: Business Operating Environment Perspective 2023.
The report, which used responses of 282 CEOs in sub-Saharan Africa, said that short-term solutions require a long-term view. “Balance is always difficult,” the report said. “Day-to-day priorities can overtake or overwhelm broader strategic transformation initiatives, and yet it is those strategic initiatives which will improve resilience and agility over time.”
Looking ahead
Even though current local and global hurdles are top of mind for CEOs, they must manage through disruption without losing sight of longer-term initiatives, the report said. When it comes to reducing costs, for example, they need to understand the differentiating capabilities — those areas where the organisation needs to exceed to deliver its value proposition.
For leaders, investments are the vehicle to sustainable growth. Top-performing companies in the sub-Saharan region tend to invest significantly in talent and supportive performance cultures, the report said.
This mindset means that retention is likely to remain at the top of the CEO agenda for the foreseeable future, the report said, as 42% of respondents in the region expect retirement and resignation rates to increase over the next year.
A sustainable future
In Africa, to support this balancing act, many leaders see the value in collaboration. “Smart companies prioritise and choose where to invest, what to produce and sell, how to create a distinctive niche, who to employ and work for, and when to take risks and pull back,” the report said.
When considering collaboration and mergers and acquisitions, many leaders are focused on identifying opportunities for delivering more value to society, the report said, such as in environmental, social, and governance (ESG) areas.
“Despite many challenges, CEOs in Africa have the tools to grow, evolve, and sustain their businesses for the long term,” the report said. While many leaders believe that skill shortages will affect profitability over the next ten years, the report said, they prioritise the retention of agile, skilled workers to deliver value through technology and drive ESG priorities.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
