South Africa’s business leaders are cautiously optimistic about potential growth prospects over the next 12 months, even as they confront a range of challenges and uncertainties.
This is revealed in PWC’s 27th Annual Global CEO Survey, which shows that business leaders envisage opportunities in areas such as technological transformation, regulatory change, sustainability, and climate-conscious practices to capitalise on emerging megatrends. However, they remain concerned about how social inequality and the operational consequences of new technologies, inflation and policy changes, may affect business.
PwC’s 2024 Africa Business Agenda: South African Perspective report draws on the insights of 380 CEOs in Sub-Saharan Africa and 48 CEOs in South Africa who participated in the global survey. The report assesses CEOs’ sentiments under four key themes: growth sentiment, threats and opportunities, Generative AI, and climate action.
PwC South Africa CEO, Shirley Machaba, said as South Africa approached national general elections, CEOs were closely monitoring how the political landscape, including economic policy, could impact their strategic direction.
“For their businesses, the ability to tactically and rapidly adapt business models to create, deliver and capture value in an evolving environment needs to be decisive. We are seeing that forward-thinking leaders are eager to leverage transformation as a catalyst for growth and resilience while continuing to mitigate risks through agile strategic planning,” said Machaba.
Following efforts over the past several years to reinvent their businesses, South Africa’s CEOs have a positive outlook on potential growth opportunities – specifically the viability of their organisations and long-term revenue outlook, compared with their global counterparts.
According to the survey, 60% of CEOs in South Africa believe the global economy will grow in the next 12 months, compared with 38% globally. However, when asked about their views on the South African economy, CEOs were divided: 33% believe the local economy will grow in the next 12 months, while 31% expect it to decline. The remaining 35% feel it will stay the same.
CEOs globally have had to meet the challenges presented by megatrends such as climate change, technological disruption, demographic shifts, social instability and a fracturing world while protecting the economic viability of their businesses.
In South Africa, 40% of CEOs identified inflation as a leading threat to how they create and deliver value, followed by macroeconomic volatility (40%). They also identified social inequality (29%) as a threat to their businesses, as well as the role played by technological change. A total of 60% of local CEOs surveyed said technology would be a significant driver in how their businesses performed in the next three years.
Many organisations want to build differentiating capabilities, manage costs strategically and grow stronger.
PwC Africa Transformation Platform Leader, Hannelie Gilmour, said it was necessary to “stay ahead” in the current fiercely competitive landscape.
“A key way to do this is through business model reinvention. This is the strategic process that fuels innovation, agility and sustainable growth. Organisations need to reshape their business models to uncover new revenue streams, optimise operations, and create unforgettable client experiences – and they must do this with trust at the centre,” said Gilmour.
On the uptake of Gen AI among South African companies, a majority (65%) of local CEOs said they had not yet adopted it, while 63% said GenAI had not yet impacted their business strategy. However, they recognised the positive impact that Gen AI could have on their operations with 54% agreeing it would improve the quality of their products and services in the next 12 months.
CEOs in South Africa are making significant strides in improving their energy efficiency by implementing initiatives to protect their companies’ physical assets or workforce from the physical impacts of climate risk, and investing in nature-based climate solutions.
“Going beyond the basic mitigation measures to fundamentally transform operations and business models for a low-carbon future is imperative,” said Lullu Krugel, PwC Africa Sustainability Leader.
“This includes pursuing renewable energy sources, overhauling supply chains for sustainability and pioneering innovative technologies and circular economy solutions.”
