In a landscape marked by global economic fluctuations, Southern African CEOs are expressing cautious optimism for the next year.
The inaugural Africa edition of the KPMG 2024 CEO Outlook released yesterday revealed a decline in CEO confidence in the global economy, dropping from 70% in 2023 to 52% in 2024.
The survey saw more than 130 CEOs in Africa share their views on geopolitics, return-to-office, ESG and generative AI.
However, participants unanimously in the survey agreed that upcoming structural reforms initiated by the Government of National Unity (GNU) could rejuvenate business sentiment moving forward.
A significant component of these reforms is the streamlining of skilled worker visas, a topic that weighs heavily on the minds of many CEOs.
The ability to attract and retain skilled professionals is seen as paramount for sustaining growth and competitiveness in an increasingly challenging economic environment.
Business Leadership South Africa (BLSA) CEO, Busi Mavuso speaking via video link from Sao Paulo, Brazil where she is attending the B20 meeting, said she was confident that confidence would improve once the political dust had settled.
“We can already see this coming through in that the International Monetary Fund (IMF) has upgraded our growth forecasts. But we must be wary of sticking our necks too far when it comes to geopolitics, as the Lady R episode showed how this could impact our currency and trading relations with the West,” Mavuso said.
This sentiment was echoed by Ignatius Sehoole, chairman and CEO of KPMG in Southern Africa. Sehoole suggested that South Africa should mimic India’s diplomatic approach.
“India is playing a very intelligent game, and that is why it is one of the top performing countries in the world,” Sehoole said.
He also emphasized the notion that, while geopolitical competition tends to induce inflation and disrupt supply chains, it may also open up new avenues for African businesses to strengthen trading links across the continent.
Speaking from Nairobi in Kenya, KPMG’s Global Geopolitics Lead, Stefano Moritsch dissected the complexities of the present geopolitical landscape.
Moritsch emphasised that while these dynamics introduce significant challenges—such as inflation, food insecurity, and heightened regulatory uncertainty—they also present opportunities for those who can navigate them strategically.
He said adopting proactive corporate approaches to understand and mitigate the multifaceted impacts of geopolitical shifts could enable businesses to build resilience and maintain continuity.
“The current situation is not all negative as shifting geopolitics offer opportunities for those who can stay ahead of the geopolitical game and leverage it to foster significant growth,” he said.
“Proactively adopting new corporate approaches to understand and manage the complex interplay of geopolitics, operational issues, cybersecurity, and supply chain risks will be key to leveraging such opportunities and addressing the challenges posed by geopolitical tensions. In doing so, CEOs can build more resilient and adaptive organisations capable of thriving in an uncertain world. This necessitates proactive measures to maintain operational resilience and continuity.”
While geopolitics and political uncertainty were not business leaders’ number one threat to growth, they remained a significant concern and it was easy to see the links between geopolitics and the other top identified threats of economic decoupling, supply chain issues and cyber security.
In the context of geopolitical complexities, economic uncertainties and growth prospects for organisations, CEO’s in Africa ranked competition for talent amongst their top five priorities.
“With 89% of African CEOs highlighting the impact of an ageing workforce, it is critical that the younger talent pool is nurtured and developed to minimise the negative impact this could have on the sustainability of organisations,” Dr Candice Hartley, head of people at KPMG in Africa.
“Despite differing concerns on the impact of the ageing workforce, retiring employees is a reality each year, and if unmanaged, will no doubt create an enormous talent risk for any organisation.”