Three in four CEOs in West Africa believe the economies of their own countries and that of the world as a whole will continue to shrink, reflecting the challenges of high inflation as well as the ongoing Russia-Ukraine war. Their concerns emerge from the sample of West African CEOs in PwC’s 26th annual global CEO survey, conducted in the last quarter of 2022.
Despite the challenges, half of the West African CEOs believe their companies will remain economically viable in the long term (10 years and more) if they remain on their current path. And two in three are ‘extremely optimistic’ about their companies’ prospects for revenue growth in the next three years.
Threat exposure
Inflation rates in Ghana and Nigeria are among the highest in Africa, placing significant strain on companies operating there. Half of the West African CEOs surveyed expect their exposure to rising inflation to remain extremely high over the next five years.
Tech
Nearly three-quarters of respondents expect their companies to be moderately or extremely exposed to cyber risk in the next half decade. Despite the inherent risks in technology adoption, four in five of the CEOs surveyed plan to invest in process and systems automation, prioritising investment in cloud, AI and other advanced tech as well as in upskilling staff.
Climate risk
Up to 32 million West Africans may be forced to move by 2050 as a consequence of climate change unless effective action is taken before 2030, according to United Nations figures. Although four in five of West African CEOs believe climate change is not an immediate risk for the companies, half of those surveyed say their companies have either taken or started to take steps to reduce the climate impact their operations have, while another quarter will implement mitigation action plans.
Industry disruptors
Like CEOs around the world, those in West Africa recognise the susceptibility of their businesses to continuing disruption fuelled by the pandemic and the Russia-Ukraine war. Changes in regulation and technology disruptors are expected to have the most significant impact on profitability over the next decade.
Talent
To meet the immediate and medium-term economic risks, CEOs say they are reducing operating costs, diversifying their product/service offerings, and finding alternative suppliers.
With skills shortages one of the major profit-suppressors in the near term, particularly in the energy and technology sectors where most of the West African CEOs surveyed operate, only a quarter are implementing hiring freezes, and even fewer are axeing staff.
