African business leaders eye growth via digital solutions, regional integration 

By Ben Eguzozie

• Big data analytics, AI top tech innovations

Business leaders in Africa have pointed to digital solutions and innovation, followed by new product or service development as the biggest propositions in terms of strategy to drive revenue growth over the next three years in the continent.

Big-data analytics and artificial intelligence are among the top-cited technological innovations with the potential to bolster operations.

The above highlights the demand for new digital solutions, and is indicative of the relative sophistication of many African markets.

This emerged from a most recent Oxford Business Group’s (OBG’s) Global CEO survey 2023, in which some 200 chief executives (CEOs) of businesses in Africa, Asia, the Gulf, and Latin America and the Caribbean were interviewed about their expectations for business in 2023.

Over half of the African CEOs (52%) said they expect circumstances to either improve or significantly improve in the year.

For instance, in the World Intellectual Property Organisation’s Global Innovation Index 2022 – which categorises countries’ relative innovation level compared to income peers – Morocco placed sixth in its income group, Tunisia was eighth and Rwanda came first.

Those markets, in addition to Kenya and South Africa, were cited as having higher-than-expected innovation capacity for their income cohort.

Additionally, when the continental CEOs were asked about the most significant barrier to implementation of the African Continental Free Trade Area (AfCFTA), they were split between political will (27%) and bureaucracy (25%). What these two answers share is a lack of confidence in institutions and policymakers, OBG analysts wrote in the report.

Even so, the responses show tacit belief in the AfCFTA’s overall worthiness: just 11 percent view process harmonisation as the most significant barrier and three percent point to regional competition. These two factors are classified as going to be detrimental to the fabric of the agreement.

While the continent remains vulnerable to external pressures, there is hope among business leaders that conditions will improve.

Africa has been among the regions most affected by global economic headwinds, including a strong US dollar, and inflation caused by high commodity and food prices. Despite this, respondents to the OBG Global CEO Survey said they are decidedly upbeat about business conditions.

Though positive, this is lower than what was seen in OBG’s previous surveys. By comparison, 35 percent of respondents think that conditions are either going to worsen or significantly worsen, highlighting varying sentiments across the continent. Much of this uncertainty is indeed likely associated with external factors, the two most important of which are exchange rate volatility, cited by 42 percent of respondents, and commodity price fluctuations (27%). Both are contributing to high inflation, which is noted by the region’s respondents as the factor most likely to negatively affect corporate performance in the short term.