Former Ethiopian Prime Minister Hailemariam Desalegn visiting a garment factory in Addis Ababa, May 2017. Despite challenges in the country, investors are upbeat about its long-term potential/Photo: Government of Ethiopia

Report shows investors’ optimism in sub-Saharan Africa despite challenges

In the largest survey of its kind, The Africa List Business Barometer reveals a high degree of confidence in the business environment across Democratic Republic of Congo (DRC), Ethiopia, Tanzania, Uganda and Zambia, despite ongoing challenges

London, 04 December 2019: A survey of over 350 business leaders across five of some of Africa’s fastest growing economies reveals a high degree of optimism – 81 per cent report that the business situation in their country is good or satisfactory, despite ongoing and well-documented challenges.

The expansion and improvement of physical and digital infrastructure, and the growth of customer demand, are some of the principal reasons for this underlying business optimism and anticipated growth. This is despite enduring challenges within the economic environment and a pressing need for upskilling employees within the workforce.

Produced by The Africa List, a membership community of Africa’s rising private sector leaders, and developed in partnership with The Wheeler Institute for Business and Development at London Business School, The Africa List Business Barometer aims to shed light on five economies that often go under-reported in global and African private sector studies.

The Africa List Business Barometer leverages the on-the-ground insights of The Africa List’s unique membership to offer thought-provoking perspective on subjects related to skills, leadership, and perspectives on how companies do ‘good’ beyond their bottom line.

Commentating on the motivation for the study, Nieros Oyegun, Head of Network at The Africa List, said: “Through this research, we want to uncover the factors for business success on the ground in these high-potential growth economies, and in doing so, reframe the well-trodden macroeconomic views held on the region. The Africa List Business Barometer also provides a platform for hundreds of our members, all exceptional business leaders, to shed light on the realities of doing business in their markets, and showcase their work, businesses, and economies beyond The Africa List community.”

A total of 357 business professionals operating in the Democratic Republic of Congo (DRC), Ethiopia, Tanzania, Uganda and Zambia answered questions on business confidence and investment, future economic conditions, finance, principal risks and opportunities.

While there are slight differences across countries and industries, there is generally strong optimism, with 87 per cent of respondents predicting that the business environment will remain the same or improve over the next year. In addition, 85 per cent intend to maintain or increase the level of investment in their business in the same period, translating their optimism into positive actions.

This optimism is despite persistent challenges, including regulatory challenges and unstable political environments. For instance, although DRC’s respondents acknowledge the challenges of the political environment in the past year, they are the most positive about the improvement in business conditions in the year to come.

Skills shortages are identified as a constraint to growth, with nearly a third of participants expressing concerns in this area. In interviews conducted alongside the survey, respondents report channelling considerable investment into upskilling their workers.

Respondents were also asked how they feel companies can ‘do good’. From the selection of answers provided, the largest proportion feel that ‘creating employment’ is the primary way in which businesses can ‘do good’. This perspective features in 43 per cent of answers.

Commentating on this aspect of the report, the co-Academic Director of the Wheeler Institute for Business and Development and the Tony and Maureen Wheeler Chair in Entrepreneurship and Marketing at London Business School, Rajesh Chandy, said, “In developed countries, ‘doing good’ is frequently characterised by good citizenship. In Africa, however, fundamental challenges such as the need for good jobs, poverty alleviation, and addressing the dearth of healthcare and education opportunities, means that companies which provide good quality jobs, training and facilities, will rank highly as examples of good work for employees and communities.”

Indeed, financial services and telecommunications stand out as the sectors considered to most noticeably be ‘doing good’, with mining also featuring significantly positively. This may be due to the higher-quality jobs, salaries and worker benefits associated with employment in industries and sectors of the type.

Elias Papaioannou, co-Academic Director of the Wheeler Institute for Business and Development Professor of Economics at London Business School and Hal Varian Visiting Professor of Economics at the MIT Department of Economics, commended the report for offering a practical and accessible resource with which to stimulate and inform discussion:

“For Africa to enter a sustainable development path, its businesses need to flourish. While governments, local and foreign, and international institutions have a crucial role, African entrepreneurs, business leaders, and innovators will spur employment, investment, and opportunity. It is vital that Africa maintains the successes of the past decades and does not revert to another period of conflict, mismanagement, and authoritarianism. It is therefore encouraging that the views of the business leaders recorded by The Africa List Business Barometer are optimistic, even when operating in challenging environments.” 

Gabrielle Woodward/The Africa List


About The Africa List

The Africa List was established within CDC Group, the UK’s development finance institution, in 2014. It is a unique membership organisation of CEOs and business leaders in Africa’s most exciting growth markets. The Africa List works to equip these members with the skills needed to lead lasting businesses on the continent.

CDC has been building businesses in Africa for over 70 years and believes that the quality of leadership, more than any other single factor, determines whether a company succeeds or fails. For Africa to thrive in the coming decades, it needs a generation of emerging leaders who are equipped for both the opportunities and challenges ahead.

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