Since the signing of the Continental Free Trade Area was signed by 44 nations in March and the resource-dependent markets recovering from commodity price shock Africa’s growth prospects are bright.
The UN has forecast GDP to grow by 3.5 percent in 2018, and sentiment among business leaders is equally strong. In OBG’s Business Barometer: Africa CEO Survey – which interviewed 1000 C-suite executives in nine African markets – 84 percent of respondents had positive or very positive expectations about local business conditions for 2018, while 74 percent said that their business was likely or very likely to make a significant capital investment.
The data collected was based on f79 percent of private companies, 44 percent international firms, 23 percent regional companies and 33 percent local firms. The countries included Kenya, Morocco, Tunisia, Ghana, Nigeria, Tanzania, Egypt, Cote D’Ivoire, and Algeria.
According to the survey, Tunisia recorded a very high percentage regarding the level of transparency for conducting business in the country followed by Kenya and Morocco. The number of respondents, however, that said Kenya has a high level of transparency in business were the majority with a percentage of more than 70. Algeria had the lowest results.
Asked about the expectations of the local business conditions in their countries, only 14 percent were sure, 70 percent gave a positive answer, and while some were neutral, only a percentage registered no hopes whatsoever.
On the top external events identified with the possibility of impacting a country or a market in the short term, rise in oil prices led with 34 percent followed by a 31 percent response on increased instability in the neighboring countries, while 8 and 4 percent gave the answer as the slowdown of the Chinese economy and trade protectionism respectively.
According to the World Bank’s “Doing Business 2018” getting credit rank, Nigeria appeared at the top in position 6 out of 190. Kenya was positioned at rank 29 with 39 percent of respondents saying the credit accessibility was easy or very easy in the country.
The projection of the GDP from the findings of the survey showed that Kenya is likely to have a GDP ranging between 5 and 6 percent. The IMF forecast for 2018 however cited that the country is likely to have a 5.5 percent GDP for the year.
The IMF forecast rated Ghana’s GDP at 8.9 percent and Nigeria at 1.9 percent, which is close to the figures predicted by the respondents.
On a global scale, the survey showed that Kenya comes in second in terms of how competitive the current tax environment is.
According to the executives, a majority of them agreed that their companies will make a significant capital investment in 2018, with 32 percent of them agreeing that the greatest need in their country or market needed leadership skills.
R&D and engineering were other two skills identified as what the countries need to develop further. A few of the respondents said that computer technology, customer service, and sales aren’t the priority with only 8 percent, 9 percent, and 4 percent supporting them respectively.