Oxford Business Group (OBG), a research and consultancy firm, has just published the results of a digital survey entitled: “Under the microscope: how do CEOs react to
Covid-19-related disruptions? ».
The purpose of this study is to assess the impact of the Coronavirus pandemic on the confidence of African businesses. Nearly 300 African senior executives responded to the questionnaire of this survey conducted in the last week of April.
The OBG survey was conducted in the last week of April, when many African countries had already taken swift action to restrict the movement of people, goods and services.
In this purely pandemic context, the majority (61%) of respondents said their businesses were operating at 1-60 per cent of their capacity at the time of the survey, with only 32 per cent operating at 61-100 per cent and 7 per cent in total shutdown. Tourism and construction were particularly affected, with 80 per cent and 78 per cent of businesses in these two sectors operating at 0-20 per cent of capacity, respectively.
In terms of the impact of Covid-19 on food security, 44% of respondents felt that the local agricultural industry would be significantly or very significantly affected. Three-quarters also responded that they expected food prices to rise somewhat in the next two to three months. These two questions raised more concern in sub-Saharan African countries.
The survey results also revealed that digitization appears to be crucial in helping businesses recover from the pandemic. Several economies in the region are already relying on innovative technologies. Nearly half (48 per cent) of the surveyed entrepreneurs indicated that their firms were currently investing significantly or very significantly in innovative technology solutions to facilitate their operations. An even larger number (53%) said that the crisis would lead to major digital transformations, significantly or very significantly.
According to Mr. Khaldoun Bouacida, CEO of BASF in Maghreb and West Africa, Africa was already a pioneer continent in the digital field: ”This trend is not new for Africa. That said, authorities in the past were reluctant to use these tools, but the crisis now offers the opportunity for African youth and startups to prove the opposite. This is an opportunity to adopt more technological solutions and digital tools in the future,” he said.
Souhir Mzali, OBG’s Editorial Director for Africa, said that Africa has a prominent place in the portfolios of companies and investors around the world. With some of the world’s fastest growing economies, the arrival of the Covid-19 pandemic has overshadowed the year’s promising prospects: According to the IMF, by 2020 Africa is expected to experience its first recession in 25 years and lose billions of dollars in production,” she said. Noting that while digital solutions address some of Africa’s immediate needs, the scale of the challenge ahead and the urgent issues that Covid-19 has highlighted cannot be underestimated.
“I consider that given the digital transformation observed during the pandemic, Internet access is emerging as a key determinant of the continent’s socio-economic prosperity and its ability to create much-needed jobs and opportunities for Africa to move forward,” Ms. Mzali said.
As a reminder, the companies surveyed come from Egypt, Ghana, Kenya, Nigeria, Algeria, Côte d’Ivoire, Morocco and Tunisia.
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