Just as different countries have been affected in contrasting ways by the pandemic, so too have industries, as lockdowns and other restrictions changed the way people work, live, travel and shop.
This disparity is reflected in confidence levels of CEOs surveyed in PwC’s “A Leadership Agenda to Take on Tomorrow” report, its 24th Annual Global CEO Survey released last Thursday.
The continuation of companies’ pandemic-induced digital acceleration, which promises productivity and other business benefits is one of the reasons why CEOs in the technology, healthcare and telecommunications sectors are optimistic about their growth.
“Leaders of technology companies are more confident than their peers in every other industry, a natural by-product of the pandemic’s digital acceleration,” Dion Shango, territory senior partners for PwC’s East, West and South Market regions in Africa, said.
CEOs of companies in industries that witnessed favourable changes in consumption patterns during the pandemic also have a positive outlook. Examples of these include telecommunications, online retail, food delivery and entertainment streaming services.
In contrast, the hospitality and leisure and transportation and logistics sectors are among those with the lowest reported confidence levels, according to the report by the London-based organization. Globally, CEOs in these sectors told PwC that they expect it will take up to three years to get back to 2019 levels.
Taking a closer look at the effects of the pandemic on companies, PwC said it sees how many companies are reinventing their workplaces as the number of infections declines and the vaccine roll-out gains momentum – with flexible work models becoming a permanent fixture for a range of roles, including sales, finance and technology.
Read Also: Policy uncertainty, over-regulation top CEOs; concerns for Africa growth
While CEOs in other parts of the world recognized COVID-19 as the top threat to their business growth in 2021, the breakdown of the PwC report revealed that the pandemic and other health crises were the least worries of the CEOs in Africa.
CEOs in the world’s second-largest continent are more concerned about the threat from the perennial challenges of policy and tax uncertainty, over-regulation and the fast-evolving reality of cyber risk, according to the findings of PwC’s 24th Annual Global CEO Survey released Thursday.
The proportion of CEOs in Africa who were extremely concerned about the top ten threat that did not include COVID-19 was significantly higher than the global average, not just in this year’s survey, but in previous years. Compared to the global average of 34 percent (28% in 2020), 49 percent of CEOs in Africa, up from the 43 percent reported last year, were very concerned.
This likely means that the ease of doing business in Africa has not made much progress as the PwC report showed it is increasingly difficult for CEOs in Africa to successfully run their business.
“Among CEOs in Africa, navigating these perils is a permanent state of being, which conflicts with their inherent optimism,” Shango, said.
Navigating the tension, according to Shango is “a perennial leadership challenge that seems particularly acute at the moment.”
Inadequate basic infrastructure, social instability, unemployment, uncertainty in economic growth, and increasing tax obligation were the other threats cited by CEOs in Africa, as gathered from the PwC’s “A Leadership Agenda to Take on Tomorrow” report.
Further breakdown of the report showed that 56 percent of CEOs in Africa were extremely concerned about tax policy uncertainty (Global: 31%), 54 percent were extremely concerned about cybersecurity, up significantly from 38 percent last year.
“In the light of the concerns that Africa’s CEOs have on policy uncertainty, tax policy uncertainty, cyber threats, and over-regulation, this is an opportunity for African business leaders to reimagine every aspect of their operating model,” Uyi Akpata, Regional Senior Partner PwC West Africa, said.
Despite the concerns of CEOs in Africa over the risks that come with doing business in the continent, their confidence in their company’s revenue prospects and the strength of the global economy was higher than they were in 2020.
When asked about their outlook for the global economy, 68 percent of CEOs in Africa said they believe it will improve (global: 76%). That is 27 percentage points greater than the previous record high for optimism over all the years PwC has been asking the question. Only 20 percent of CEOs in Africa expected the economy to improve in 2020.
Banking on the positive sentiment, PwC which has analyzed CEO confidence levels dating back to 2008 to determine both the direction and the strength of global GDP, estimated that global growth could rise as much as 5.0 percent- slightly lower than recent IMF projections that the global economy will grow 6 percent in 2021. Global GDP contract 3.3 percent in 2020 (by 1.9% in sub-Saharan Africa) – marking its worst performance since the Great Depression.
On the industries with the most growth prospects, leaders of technology companies who were surveyed in the report said they were more confident than their peers in every other industry, a natural by-product of the pandemic’s digital acceleration.
Analysis of the report revealed that CEO’s optimism about a rebound in the global economy did not necessarily translate into their expectations about the short-term prospects of their own businesses.
About 30 percent of CEO in Africa were very confident about their company’s growth proposes in the next 12 months, compared to 36 percent of global CEOs. According to PWC, while CEOs in many countries contemplate vaccine roll-outs and look forward to the resumptions of some form of business as usual, those in Africa are a lot more guarded.
“The reason for this confidence gap vary from African countries still being at an earlier stage of the pandemic life cycle to uncertainty about governments’ COVID-19 response and policy direction in the aftermath,” Nadine Tinen, territory senior partner for PwC in sub-Saharan Francophone Africa, said.
However, there was a significant improvement in optimism as 42 percent of CEOs in Africa said they were very confident about their revenue growth prospects over the next three years.
As business leaders adapt to the current circumstances and prepare for the anticipated rebound, PwC said a critical question will be: which management approaches should businesses retain from the rapid response mode most of them embraced during 2020?
According to the report by the London-based company that surveyed over 5000 CEOs globally, “fast, high-quality decision-making– a hallmark of many companies’ pandemic responses – will be on the top of most leaders’ ‘keep’ lists.”
Priorities, according to the report, include ensuring top management is focused on the big issues that matter most, engaging with people up and down the organization, revisiting critical decisions frequently, and pushing to understand unintended consequences.
