Dike Onwuamaeze
Business leaders in Africa, including Nigeria, have numbered new tax policies, cyber threats, policy uncertainties and over-regulation of private enterprises among the top business concerns that would affect businesses as they get set for the anticipated economic rebound in the post-COVID-19 pandemic era.
These were some of the key features of the eight edition of PwC’s Africa Business Agenda 2021 report titled: “A Leadership Agenda to Take on Tomorrow,” that highlighted Africa findings of the PwC’s 24th Annual Global CEO Survey.
The survey showed that CEOs in Africa were more concerned about the perennial challenges of policy uncertainty, tax uncertainty, over-regulation, and the fast-evolving reality of cyber threats than the pandemic and other health crises.
The CEO for PwC Africa, Mr. Dion Shango, said: “In Africa, economic and policy uncertainty, among other issues, have cast some doubt upon business leaders’ hopes for their own companies’ immediate growth prospects. Although there is a drop in optimism over the short-term, African business leaders do see some opportunities on the continent – but overall, they are playing it safe.
“The reasons for this gap in confidence vary from African countries … (but) despite the current uncertainty, many African business leaders have found that the COVID-19 pandemic has also unleashed extraordinary energy, creativity and resourcefulness within their organisations.
“We can expect to see a continuation of accelerated digitalisation brought to the fore by the pandemic, which promises productivity, data-driven insights and other business benefits, but at the same time increases the threat of cyber-attacks and the spread of misinformation.”
According to the report, 82 per cent of the CEOs in Africa believed that changes in tax policy would constrain businesses to reconsider their cost structure.
The PwC explained that fear of increased taxation stemmed from the logic that business should be made to repay debts taken by governments to provide the stimulus that mitigated the impacts of COVID-19 on their respective domestic economies and on individual citizens.
It stated: “Upward pressures on government debts, coupled with the pandemic’s effect on economic growth and government’s revenues naturally raises concerns relating to increases in tax instruments to raise additional revenue.
“This could include, for instance, digital tax, which could affect platform based companies that have profited during the pandemic. The introduction of additional taxes will inevitably result in increased complexities.”
The survey also showed that more than 52 per cent of the CEOs in Africa planned to significantly increase their long-term investments in digital transformation and implement initiatives that would yield cost efficiencies, cyber-security, data privacy, leadership, and talent development.
The survey also showed that the CEOs viewed digital revolution as a bag of mixed fortunes that became a major source of anxiety to business leaders in spite of its positive transformation of business operations and value creation.
“Now among the top three concerns in Africa, 54 per cent of CEOs on the continent say they are extremely concerned about cybersecurity, up significantly from 38 per cent last year. This response is likely influenced by the increase in high-visibility cyber-attacks during 2020 and the normalisation of remote working in response to the COVID-19 pandemic, which has exposed many systems to attack,” the PwC’s survey said.
Furthermore, 68 per cent of the CEOs in Africa believed that the global economy would improve during the next 12 months.
Yet, their optimism about a rebound in the global economy would not translate into improved short-term prospects for their own businesses. The survey stated that only 30 per cent of Africa CEOs were confident about their company’s short term growth prospects in the next 12 months though they showed optimism regarding their revenue growth prospects over the next three years.
The survey also showed that most business leaders would retain the management approach they embraced during the peak of the COVID-19 crises.
According to the survey, “fast, high-quality decision-making will be on the top of most leaders’ ‘keep’ lists. Priorities include ensuring top management is focused on the big issues that matter most, engaging with people up and down the organisation, revisiting critical decisions frequently, and pushing to understand unintended consequences.”
The survey further stated that CEOs in Africa would take cautious approach by focusing on things they have more control over to drive profitability by pursuing organic growth, operational efficiencies, and forming a new strategic alliance or joint venture.
“It is no surprise that they are taking a cautious approach by focusing on things they have more control over to drive profitability,” it added.
However, the report noted that 74 per cent of the African CEOs were more concerned about supply chain disruption and trade conflicts than trade protectionism, moreover, many of the CEOs, “are not looking beyond their borders for growth.”
