Reinvention as a strategic imperative remains the theme of PwC’s 28th Annual Global CEO Survey: East Africa perspective, which polled 169 CEOs in 5 countries in East Africa from 1 October through 8 November 2024. This report titled “From resilience to reinvention” offers an East Africa perspective from 169 respondents from the region.
Most of East African CEOs are moving rapidly to capture the growth and value-creation potential happening in the region, investing in generative AI, addressing a number of opportunities and threats, and reinventing their operations and business models to create value in new ways. Yet many others are moving slowly, constrained by leadership mindsets and processes that lead to inertia.
“This is an exciting time of change as technological disruption and other megatrends are driving a fundamental reconfiguration of our production systems as we know them today, creating new domains of growth. The shifts businesses need to make will take time, but it is more than encouraging to see that CEOs are full speed into their reinvention journey despite the challenges they face.”
Highlights
Economic sentiment and performance
- Positive economic outlook: East Africa CEOs are optimistic about their territory's economic growth, with 72% expecting growth in the next 12 months.
- Global economic growth: 66% of the region’s CEOs anticipate a global economic growth in the next 12 months, a significant increase from the previous year's 42%, and higher than the global average of 58%.
- Confidence in future growth: 44% of East Africa CEOs are ‘cautiously confident’ about their company's revenue growth in the next 12 months, with only 44% expressing ‘confidence’. There is greater confidence in the medium term, with 58% of CEOs ‘extremely confident’ about their company's performance when a three-year outlook is considered.
- Key threats: Macroeconomic volatility, inflation, and cyber risks were seen as major threats in the next 12 months.
"With economic growth picking up in Africa despite growing threats, it's not surprising that CEOs in East Africa have a somewhat more positive outlook on the future. Although their immediate apprehensions centre around macroeconomic volatility, inflation, and cyber risk at the moment, their real concerns are more focused on the long-term threats."
Reinvention
- Long-term viability: More than half of the East Africa CEOs believe their companies will be viable for more than 10 years if they continue their current path.
- Innovation and adaptation: Companies are focusing on innovation and adapting to market conditions, including adopting new technologies and business models.
- Internal challenges: Lack of necessary skills, organisational inefficiency, and implementation difficulties are key internal factors affecting business viability.
The Ugandan economy has shown remarkable resilience marked by a stable Uganda Shiling amid volatility in the region; a benign inflationary environment; and rapid growth of private sector credit - all of which contribute to attracting foreign direct investments (FDI). Uganda's FDI grew by nearly 80% from US$1.65 bn in 2021 to US$2.95 bn in 2022, driven primarily by achievement of the Final Investment Decision for Uganda's oil and gas projects in February 2022. With total spend attached to these projects estimated at US$10 bn, the trend in FDI growth is set to continue over the next few years. On top of oil & gas resources, Government of Uganda has started a programme of attracting investment into the country's wider mineral wealth as part of an ambitious economic expansion plan anchored in development of agriculture, tourism, mining and science, technology and innovation. Achievement of these plans will require sustained growth in FDI and it's positive to see that CEOs have embraced this agenda in their spending plans.
AI
- Impact on employment: Contrary to popular belief, 70% of CEOs report little to no change in headcount due to generative AI.
- Efficiency and profitability: Generative AI has increased efficiencies and is expected to boost profitability, with 53% of CEOs anticipating increased profitability in the next 12 months.
"CEOs in East Africa see AI as a game-changing advancement to drive efficiency and enhance workforce productivity. As organisations embrace systematic AI integration, they unlock opportunities for growth, innovation and reinvention to be agile, intelligent and resilient for the world of tomorrow. "Those who adapt to AI will thrive in tomorrow’s world, while those who hesitate will be left behind."
Climate action
- Climate-friendly Investments: Companies have initiated climate-friendly investments in the last five years, although certain factors have inhibited further investments in the last 12 months.
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PwC’s 28th Annual Global CEO Survey - East Africa perspective
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