DESPITE the Israeli war that is ravaging the Middle East with the United States fully backing Israeli armed forces, sending economies to shock – African chief executives felt it was an “exciting time in the history of the African continent as they painted a positive economic outlook” for the East, West, and Southern African regions.
This was presented last week in Johannesburg during the launch of the inaugural KPMG Africa CEO Outlook.
The event marked the debut of the Africa Edition, featuring comprehensive research and insights from top CEOs across East, West, and Southern Africa.
According to Ignatius Sehoole, chairman and CEO of KPMG in Africa, there was a significant consideration for escalating uncertainty and rising global crises – which has forced a reset in strategic thinking, a consolidation of talent, a renewed focus on collaborative approaches, as well as an eye on upcoming technology and geopolitics.
The perspectives of the more than 130 CEOs from three regions stated that they had confidence in business growth in several areas but were most concerned about the impact of economic decoupling between countries, which may lead to pricing pressures in the next three years, followed by cybersecurity and emerging or disruptive technologies.
“This confidence and prospects for business are refreshing, especially considering that local CEO confidence in the global economy has waned in 2024, reflecting the growing complexities of the environment they face – down to 52% compared to 2023’s 70% confidence levels,” said Frank Blackmore, lead economist at KPMG Southern Africa.
According to the report, despite a backdrop of global economic uncertainties and varying economic landscapes across the three regions, CEOs remained confident in the growth aspects of their organisations.
“In East Africa, the projections indicate a 5.1% expansion in 2024, with CEOs likely to take a more cautious approach when pursuing M&A due to prevailing factors such as economic volatility and currency risk. Only 26% of CEOs expect growth through M&A because of the existing economic conditions.
“West Africa’s economic outlook in 2024 reflects cautious optimism among CEOs, with 60% confident in their country's economic growth, down from 73% last year. Key risks include trade regulation, operational issues, and rising cybercrime.
“CEOs are focusing on agility, resilience, and embracing technology, especially generative AI, to navigate challenges. Improving customer experience and hedging against inflation are top priorities, along with talent retention,” Blackmore said.
KPMG’s Global Geopolitics lead Stefano Moritsch said geopolitical tensions had caused global economic damage, but stressed that the situation was not as bad.
“The current situation is not all negative, as shifting geopolitics offer opportunities for those who can stay ahead of the geopolitical game and leverage it to foster significant growth. Proactively adopting new corporate approaches to understand and manage the complex interplay of geopolitics, operational issues, cybersecurity, and supply chain risks will be key to leveraging such opportunities and addressing the challenges posed by geopolitical tensions,” he said.
He added that in doing so, CEOs could build more resilience because this necessitated proactive measures to maintain operational resilience and continuity.
Accelerating innovation and generative AI
Martin Kimani, associate director at KPMG in Africa, encouraged the implementation of AI, adding that artificial intelligence models had the potential to transform businesses and everyday life.
“The state of readiness in organisations for impending cyberattacks is low, which has prompted the act to work together to bridge the skills and cultural gap seen in many of these organisations. Fostering a cybersecurity-centric culture is crucial to how AI is incorporated into these businesses. We need to ensure this technology is applied safely and securely.”
Talent and the dynamics of the evolving workforce in Africa.
Dr Candice Hartley, head of people at KPMG in Africa, stressed the need to nurture the younger talent as 89% of African CEOs highlighted the impact of an ageing workforce on the continent.
“It is critical that the younger talent pool is nurtured and developed to minimise the negative impact this could have on the sustainability of organisations. Despite differing concerns on the impact of the ageing workforce, retiring employees is a reality each year and, if unmanaged, will no doubt create an enormous talent risk for any organisation,” Hartley said.
The 10th edition of the KPMG CEO Outlook, conducted with 1 325 CEOs between 25 July and 29 August 2024, provided a unique insight into the mindset, strategies, and planning tactics of CEOs.
All CEOs have annual revenues of more than $500 million (R8.8 billion) and one-third of the companies surveyed have more than $10bn in annual revenue.
thabo.makwakwa@inl.ac.za