Africa business leaders optimistic of swift economic recovery in 2021

Business leaders in Africa have expressed the hope that economic prosperity and an increase in trading activities would return to the continent from 2021.

Their optimism is the sequel to the outcome of a survey of more than 150 chief executive officers (CEOs) in the continent released by the Africa CEO Forum and Deloitte.

The survey provides insights into the climate, situation, and outlook of the African private sector amid the COVID-19 pandemic.

The leaders had decried the negative economic impact of the Covid-19 pandemic on the continent in the past six months, saying it crippled prosperity against earlier booms projected for the year.

According to the survey, 95 per cent of the CEOs said the Covid-19 crisis has had negative consequences in Africa across all sectors, and sub-regions with much impact on business activities.

Although the consumer business, financial services, and energy sectors were the most optimistic prior to the crisis, at the moment, they are the most concerned about the future. However, the morale of stakeholders from the food, health, and education industries is the least impacted.

The survey states, “Across all sectors, the sense of resilience is striking, as 80 per cent of survey respondents exhibit a high degree of confidence about the continent’s long-term outlook compared with just 73 per cent one year earlier. This is illustrated by the fact that 60 per cent are confident that business will ‘return to normal’ in 2021. Respondents are also pleased about current and future developments in terms of increasing local production, but above all in terms of digitalisation for which they expect significant support from public authorities.”

The business leaders’ confidence is also anchored by the hope of the continent’s further economic integration. Accordingly, they share the same level of enthusiasm for the single continental market initiative (AfCFTA), considered to be a significant driver in accelerating the pace of growth.

“Far from leaving it entirely in the hands of public authorities, they are aware that the success or failure of this undertaking is also their responsibility. But this willingness does not keep the CEOs surveyed from expressing a certain amount of skepticism as to the short-term feasibility of the AfCFTA’s effective launch.”

The CEOs identified business climate, and quality of infrastructure, as the main roadblocks to accelerating strategic growth for the continent.

“Relationships with authorities remain a point of contention and African CEOs continuously expect more as well as improvement from their country’s government. While they acknowledge that the Covid-19 health crisis has given a boost to partnerships between public and private stakeholders, and that faced with an emergency, public stakeholders were able to quickly adapt and eliminate bureaucratic hurdles. About 93 per cent of respondents feel that private sector recommendations continue to be inadequately taken into account by public authorities,” the survey stated.

The Managing Partner, Deloitte Afrique Francophone, Brice Chasles, said it is up to the continent’s decision-makers and leaders from both the public and private sectors to map its exact business contours and support development in the years to come.

This, he noted, will require greater cooperation, and an approach centred on strengthened partnerships between public authorities, international lenders, and businesses, which all respondents in our survey seem to be calling for.

Also speaking on the report, the Chief Executive Officer, Conakry Terminal, Tahirou Barry, said growth has to happen across the value chain and evenly at all levels.

She noted that if we invest to increase the port’s size, but nothing is done on the transport side to improve the quality of lorries and increase their turnaround, then the value created on one end of the value chain would be lost at the other end.

Barry stressed that strengthening infrastructure is an important first step to optimising value chain flows.