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A sizeable majority of the executives interviewed for the 2019 edition of the Business Barometer: Africa CEO Survey carried out by Oxford Business Group (OBG) had high expectations for both the local economic outlook in the coming 12 months and intra-regional trade levels.
As part of its second survey on the African economy, the global research and consultancy firm asked 787 C-suite executives in eight countries across the continent a wide-ranging series of questions on a face-to-face basis aimed at gauging business sentiment.
More than four-fifths (84%) of executives said they felt positive or very positive about local business conditions in the year ahead, with 78% telling OBG that they expected their company to make a significant investment in the months ahead, up from 74% in 2018’s survey.
A similar number (72%) of interviewees were confident that the African Continental Free Trade Area (AfCFTA) would have a positive or very positive impact on intra-regional trade levels. The deal aims to establish a single continental market for goods and services, and ease the free movement of businesspeople and investment.
While business sentiment was largely high among respondents, the executives interviewed by OBG were aware that key external events could weigh on African markets in the short to medium term. The majority of those interviewed (38%) cited a rise in oil prices as the event most likely to impact their economy, with executives in oil-producing nations such as Nigeria, Algeria, Ghana and Kenya accounting for most of these respondents. Chosen by 23%, instability in neighbouring countries came second.
Job creation is a key target of the AfCFTA and all the more pressing, given that 10m - 12m young people enter the regional job market every year. More than one-third (36%) of executives interviewed identified leadership as the skill in greatest need, with research and development, and engineering both selected by 14% of respondents.
Commenting in her blog, Souhir Mzali, OBG’s Regional Editor for Africa, said the reasons for optimism among business leaders were multiple, ranging from rising interest in the continent from China and beyond, and the investments that have ensued to the rollout of public investment programmes for infrastructure. The AfCFTA, she added, while far from challenge-free, had the potential to significantly boost trade volumes.
“As it stands, Africa lags behind other regional blocs when it comes to trade, accounting for a mere 16% of intra-continental trade volumes, compared to over 50% in Asia and over 60% in Europe,” she said. “There remain many challenges to navigate before the AfCFTA’s benefits can be fully felt, from infrastructure gaps and unreliable power supply, to heavy administration and corruption. However, with the AfCFTA expected to be implemented within a month after the required signatures reach the African Union headquarters, Africa has much to look forward to.”
Mzali also highlighted the key part that Africa’s digital drive would play in creating much-needed jobs for the region’s growing workforce.
“Only 22% of the continent’s households have access to the internet,” she said. “With one in four people on earth expected to be living in Africa by 2050, filling these digital gaps has become more pressing than ever given the growing social and economic significance of digitalisation. Supporting Africa’s digital revolution with the required jobs to carry it out is of utmost importance.”
Mzali’s in-depth evaluation of the survey’s results can be found on OBG’s Editor’s Blog, at https://oxfordbusinessgroup.com/blog/souhir-mzali/obg-business-barometer/afcfta-has-crossed-ratification-threshold-%E2%80%93-what%E2%80%99s-next All four of OBG’s regional managing editors use the platform to share their expert analysis of the latest developments taking place across the sectors of the 30+ high-growth markets covered by the company’s research.
The OBG Business Barometer: CEO Surveys features in the Group’s extensive portfolio of research tools. The full results of the survey on Africa will be made available online and in print. Similar studies are also under way in the other markets in which OBG operates.
About OBG Business Barometer
OBG Business Barometer: Africa CEO Survey Copyright (c). All rights reserved.
This survey has been designed to assess business sentiment amongst business leaders (Chief Executives or equivalent) and their outlook for the next 12 months. Unlike many surveys, the OBG Business Barometer is conducted by OBG staff on a face-to-face basis, across the full range of industries, company sizes and functional specialties. The results are anonymous.
OBG Business Barometer is based on data from companies with revenue within the following parameters, among others:
• 17% of companies surveyed were based in Morocco
• 16% of companies surveyed were based in Nigeria
• 15% of companies surveyed were based in Egypt
• 13% of companies surveyed were based in Côte d’Ivoire
• 13% of companies surveyed were based in Ghana
• 12% of companies surveyed were based in Algeria
• 11% of companies surveyed were based in Kenya
• 5% of companies surveyed were based in Djibouti
The data generated allows for analysis of sentiment within an individual country, as well as regionally and globally. Additionally, comparisons can be drawn between both individual countries and regionally. The results are presented statistically within infographics and discussed in articles written by OBG Managing Editors.
OBG provides this survey, infographics and accompanying analysis from sources believed to be reliable, for information purposes only.
OBG accepts no responsibility for any loss, financial or otherwise, sustained by any person or organisation using it. For further information on the content of the survey, please contact: Souhir Mzali, Regional Editor, Africa, at smzali@oxfordbusinessgroup.com. Should you wish to reproduce any element of this survey, infographics and accompanying analysis please contact: mdeblois@oxfordbusinessgroup.com. Any unauthorised reproduction will be considered an infringement of the Copyright. For further details about OBG and how to subscribe to our widely acclaimed business intelligence publication please visit www.oxfordbusinessgroup.com
Click here to subscribe to Oxford Business Group’s latest content: http://www.oxfordbusinessgroup.com/country-reports
About Oxford Business Group
Oxford Business Group (OBG) is a global research and consultancy company with a presence in over 30 countries, from Africa, Asia and the Middle East to the Americas. A distinctive and respected provider of on-the-ground intelligence on many of the world’s fastest growing markets, OBG has offices in London, Berlin, Dubai and Istanbul, and a network of local bureaus across the countries in which we operate.
Through its range of products, OBG offers comprehensive and accurate analysis of macroeconomic and sectoral developments, including banking, capital markets, tourism, energy, transport, industry and ICT. OBG provides business intelligence to its subscribers through multiple platforms: Economic News and Views, OBG Business Barometer - CEO Survey, Roundtables and conferences, Global Platform - exclusive video interviews, The Report publications and its Consultancy division.
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