Oxford Business Group Launches Africa COVID-19 CEO Survey

Event Africa Contributor 25/05/2020 Industry Association News

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A new CEO Survey on Africa carried out by the global research and advisory company Oxford Business Group (OBG) in partnership with BASF looks in detail at how countries across the region are responding to Covid-19, which sectors of the economy have been most adversely affected and what form recovery is likely to take.

OBG began producing its CEO Surveys in 2016 as a way of giving licence-holders a handle on business sentiment in the economies it covers, termed the Yellow Slice markets, in reference to its corporate colour. Since then, they have become highly popular and integral part of the firm’s portfolio of research tools.

To assess the impact of the coronavirus pandemic on business sentiment, OBG asked almost 300 C-suite executives across Africa a wide-ranging series of questions. The results of the digital survey, titled “Under the microscope: How are CEOs responding to the disruption of Covid-19?” can be viewed in full here

OBG asked business leaders for their thoughts on a variety of issues spanning the economic sectors, including health, local manufacturing, agriculture and food security, and technology and innovation. Alongside the findings, the survey includes an in-depth analysis by Souhir Mzali, OBG’s Africa Regional Editor, of both the responses and the broader economic climate in which they were obtained.

OBG’s survey was undertaken in the last week of April, at a time when many African nations had already moved quickly to restrict the movement of people, goods and services, and close non-essential business due to the spread of Covid-19, and answers to a question about operational capacity at this time reflect this. The majority (61%) of interviewees said their businesses were operating at 1-60% capacity at the time they were surveyed, with just 32% functioning at 61-100% and 7% on total shutdown. Tourism and construction were hit particularly hard, with 80% and 78% of companies, respectively, operating at 0-20% capacity.

In a sign that the virus has revealed the extent to which Africa is ill-prepared to tackle a pandemic on the scale of the coronavirus following years of underinvestment in health care, a large majority (82%) of executives said they expected the Covid-19 pandemic to lead to increased public spending in the sector in the longer term.

Covid-19 has also brought longstanding weaknesses in value and supply chains to the fore, highlighting the extent to which several nations across the continent rely on imported manufactured goods to meet domestic demand. Unsurprisingly, given the circumstances, 66% of respondents said they thought the pandemic was likely or very likely to boost industry and manufacturing in their country. Raw materials and transport and logistics were seen as presenting the biggest threat to industrial supply chains, cited by 28% and 22% of executives respectively.

“The crisis is a big changer, and with the disruptions in supply chains especially from China, many countries will opt to produce locally rather than import,” Khaldoun Bouacida, Managing Director and Country Cluster Head for North West Africa at BASF.

The coronavirus is expected to take its toll on Africa’s agriculture sector, with a knock-on effect anticipated on food security. From those surveyed, 44% told OBG that they thought disruptions to the local agriculture industry would be significant or very significant. Three-quarters also said they expected food prices to increase somewhat in the coming two to three months. Concerns on both issues were most pronounced in sub-Saharan African countries.

Looking ahead, digitisation will be instrumental in moving companies forward in the aftermath of Covid-19, with several of the region’s economies already tapping into innovative technologies. Almost half (48%) of respondents told OBG that their firm was currently investing significantly or vary significantly in innovative tech solutions to facilitate their operations. Even more (53%) said the crisis will significantly or very significantly lead to major digital transformations.

According to Bouacida, Africa was already a pioneer in the digital field. “This trend is not new to Africa. Previously, though, authorities were at times reluctant to implement such tools but this crisis now offers African youth and start-ups the opportunity to show that it works. I see this as an opening to implement more technological solutions and digital tools moving forward,” he said.

Mzali said that while Africa has risen to the top of business and investor portfolios worldwide and is today home to some of the world’s fastest-growing economies, the arrival of the Covid-19 pandemic has clouded what was a promising outlook for the year.

“While the virus was slow to spread at first, it is now gripping the continent, with cases rising dramatically at the end of April,” she said. “According to the IMF, Africa is expected to experience its first recession in 25 years in 2020 and lose billions of dollars in output.”

Mzali added that while digital solutions are addressing some of Africa’s immediate needs, the scope of the challenge ahead and the pressing issues that Covid-19 has brought into the spotlight cannot be underestimated.

“With the shifts observed in digital processes during the pandemic, internet access will be a major determining factor of the continent’s socio-economic prosperity and its ability to create much-needed jobs and opportunities moving forward,” she noted.

Mzali’s viewpoint can be found in full on OBG’s Editor’s Blog, alongside additional analysis by all four of OBG’s Regional Editors on the markets that they cover. Titled “Next Frontier”, the blog serves as a platform for OBG’s experts to share their thoughts on the latest developments taking place across the sectors of the 30+ high-growth markets covered by the company’s research.  

The OBG CEO Surveys feature in the Group’s extensive portfolio of research tools. The full results of the surveys are available online and in print. Similar studies are also under way in the many markets in which OBG operates.

About OBG CEO Surveys

This survey has been designed to assess business sentiment among business leaders (chief executives or equivalent) and their outlook in light of Covid-19. For this special edition, the survey was conducted online by OBG staff, across the full range of industries, company sizes and functional specialties. The results are anonymous.

This Africa Covid-19 CEO Survey is based on 281 responses from companies within the following parameters, among others:

• 15.3% of companies surveyed were from Egypt

• 5% of companies surveyed were from Ghana

• 17.4% of companies surveyed were from Kenya

• 18.5% of companies surveyed were from Nigeria

• 10.7% of companies surveyed were from Algeria

• 12.5% of companies surveyed were from Côte d’Ivoire

• 13.9% of companies surveyed were from Morocco

• 6.8% of companies surveyed were from Tunisia

The data generated allows for analysis of sentiment within an individual country, as well as regionally. The results are presented statistically within infographics and discussed in articles written by OBG Managing Editors. OBG provides this survey, infographics and accompanying analysis from sources believed to be reliable, for information purposes only. OBG accepts no responsibility for any loss, financial or otherwise, sustained by any person or organisation using it.