Southern Africa CEOs grapple with uncertainty and challenges due to global upheavals
CEOs are making smaller, more cautious decisions and intensifying collaboration.
Southern African CEOs are facing a complex web of uncertainties, as revealed by the KPMG 2023 CEO Outlook Survey – Southern Africa Edition.
According to Ignatius Sehoole, CEO of KPMG in Southern Africa, the region’s potential is there, but so is its vulnerability to global upheavals. He explained that CEOs are grappling with challenges like volatile currencies and stock markets due to a risk-averse global investment climate. Their chosen strategy is a focused approach to organic growth.
The report revealed that in South Africa, a somber outlook prevails as businesses confront poverty and rising unemployment rates. This environment, Segoole said, renders the corporate structure susceptible to the turbulent waves of global crises. “Companies, though committed to diversity and inclusion, are struggling to translate it into meaningful action,” he explained.
In response, CEOs are making smaller, more cautious decisions and intensifying collaboration, both within and outside their organisations, to enhance resilience.
Firm belief in growth
Unlike their global counterparts, Southern African CEOs express unwavering faith in their companies’ growth prospects, with an overwhelming 90% expressing confidence.
Furthermore, the report stated that 96% of South African CEOs anticipate a surge in earnings over the next three years, with a substantial portion forecasting earnings growth ranging between 2.5% and 5%. These optimistic outlooks find their roots in a shift away from ambitious deal-making towards a more cautious approach to navigating an uncertain world.
Sehoole said that Southern African CEOs have their eyes firmly fixed on emerging technologies, particularly generative artificial intelligence (GenAI). Despite economic hurdles, 71% of CEOs prioritise investments in GenAI.
However, this enthusiasm is not without trepidation.
The report showed that they worry about obtaining the necessary technical skills and adherence to GenAI regulations. Ethical dilemmas loom, with 80% agreeing that the absence of regulation could impede the technology’s successful adoption. Cybersecurity concerns were also prominent, as 84% acknowledged GenAI’s potential to enhance security but also to introduce new vulnerabilities.
Workforce and talent
Post-pandemic, the concept of remote work is evolving. The report revealed that a substantial 72% of Southern African CEOs anticipate a return to physical workplaces within the next three years. A minority envisions a continued hybrid or remote work setup.
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Notably, despite the rise of GenAI, 73% of CEOs intend to allocate their resources to technology rather than workforce development. Nevertheless, 96% of South African CEOs expect to expand their workforce in the next three years.
There’s a growing emphasis on environmental, social, and governance (ESG) principles. These are seen as integral to corporate strategies, with a focus on branding, customer relations, and employee engagement. It’s recognised that financial gains are not the sole metric of success.
The report also revealed that around 58% of Southern Africa’s CEOs anticipate a significant impact from their ESG initiatives within 3 to 7 years. The importance of gender equality in leadership is emphasised by 83% of CEOs. However, challenges remain, particularly related to the cost of change and finding suitable technology.