African CEOs reveal threats stalking firms

By Patrick GithinjiAfrican chief executives want to make money for their companies, but the most significant stumbling block they confront as they work to make their companies grow include business risks, talent retention and how to make sound investment decisions.According to PricewaterhouseCoopers (PwC) annual survey released last week, 88 per cent of the Chief Executive Officers (CEOs) cited business risk as the source of their greatest pressure, retention of talent (86 per cent) and investment opportunities (85 per cent).The survey was conducted between September and November last year and targeted 200 CEOs in Africa. The purpose of the survey was to understand the factors that influence CEOs future outlook.Bob Collymore, Safaricom CEO"The same priorities are those identified by CEOs in our global survey," said Philip Kinisu, Territory Senior Partner and CEO PwC Africa Central.Seventy-Seven per cent of global CEOs interviewed separately from their African counterparts also cited business risk as a major worry, 83 per cent alluded to talent while 76 per cent were more worried about their investment decisions."CEOs in Africa manage a complex basket of risks and the survey demonstrates a heightened sense of risk awareness that is unsurprising considering the high levels of growth that CEOs anticipate," said Kinisu.The concern regarding business risks is, however, great enough for the majority of CEOs (77 per cent citing exchange rate volatility) and economic uncertainty (74 per cent) to agree that they need to raise in-house skills to better manage their companies.Other top threats mentioned include high energy costs, inadequate infrastructure and global political instability, but Kinisu opines that despite these threats most CEOs are not strongly committed to mitigation strategies."Only 46 per cent of these CEOs plan to mitigate the risk of exchange rate volatility, 55 per cent plan to mitigate the threat of global political instability, 47 per cent committed on economic uncertainty, 35 per cent on energy costs and 22 per cent on inadequate infrastructure," he explained.According to Nasim Devji, CEO of Diamond Trust Bank and a survey respondent, the thought of business risk keeps her awake at night and managing it is one of her top priorities.Electronic BankingDevji cites the shift to electronic banking as her greatest risk because it has come with increased electronic fraud."Globally, the shift to electronic banking has come with an increase in electronic fraud. Previously, banks were vulnerable only to people who could walk into their premises. Inter-connectivity, however, means that fraud can be perpetrated remotely," she said.She says one of the mechanisms being employed by the bank to manage such risk is vetting of new employees.The survey shows that most of the firms that were surveyed had maintained their headcounts at par with global trends over the last few years and that there was an eight per cent increase in employee recruitment in Africa compared to other continents across the globe.According to him, 68 per cent of the CEOs surveyed were particularly concerned about competitors while 70 per cent were focusing on the limited supply of skilled candidates.James Mwangi, Equity Bank CEO says that the exact skills required depend a lot on the lifecycle of an institution."Depending upon the needs of each, Equity Bank looks at executive training programmes, refresher courses and outside consultants to deploy the right skills as and when required," Mwangi said.The survey shows that only five per cent of Kenyan CEOs intend to increase their companies’ headcount.According to the PwC survey, keeping the right people in a firm is harder than finding them. It Martin Oduor, CEO Kenya Commercial Bankalso shows that younger workers and women are voting with their feet and choosing to work for companies that demonstrate commitment on work life balance.Roughly, half of CEOs in Africa plan to change their policies to retain more women and provide more incentives to younger workers.Retain WorkersIn Tanzania, 70 per cent of the CEOs are focused on policies to attract and retain more women. According to Mbuvi Ngunze, Managing Director of Mbeya Cement in Tanzania, these efforts are intended to combat the ‘historically male -dominated environment’."The message is that many CEOs are trying to manage talent and retain workers, including younger employees and women," Ngunze said.But Bob Collymore, Safaricom CEO says companies should take responsibility for cultivating talent in-house rather than poaching from competitors."If you take raw graduates and invest in training them in what they do, then you will find someone who will be loyal to your company and will actually work for less money," Collymore said.Themed The Africa Business Agenda, the study found that most CEOs expect significant growth within their companies.Most of the CEOs interviewed said they intend to expand their business within the continent, with most saying they had identified tremendous potential in the continent.The survey noted the CEOs positive prospects in Africa were driven by high Gross Domestic Product (GDP) growth in the region, political stability and impressive financial results.Competitive PressureKinisu cites new product and service development among the growth opportunities identified by 30 per cent of the CEOs who were interviewed for the survey.The survey noted that over 60 per cent of CEOs in Africa are very confident of their firms’ growth over the next 12 months. A massive 93 per cent see growth potential in Africa compared to 75 per cent of CEOs in PwC global survey.The study further revealed that 54 per cent of CEOs were ready to enter a new strategic alliance or joint venture while 40 per cent intended to complete a cross-border merger or acquisition over the next 12 months so as to respond to competitive pressure and customer demand.

African CEOs reveal threats stalking firms

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Similar Articles

Why Africa's growth depends on bankable projects, not capital

Kenya must rethink withholding tax on creative services

Spotlight on Gulf Energy's dominance of energy sector

How Treasury is edging out 'mama mboga' for banks

DIGGER JOBS

Digger Motors

Digger Real Estate

African CEOs reveal threats stalking firms

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS