Confidence is very strong among Africa’s CEOs. Confidence is inspired by growth potential across every industry sector and in every market in Africa. Even so, there is a great deal of variation among companies that wish to harness this potential. The main underlying factor allowing companies to realise their full potential in Africa is agility.
These companies may have some exposure to risks, but they have designed their responses, procedures and safeguards effectively. They implement deliberate growth strategies based on an evolving understanding of the places where they operate, their customers and supply lines. And they employ the best and the brightest to achieve their objectives. Not only that, but their high-potential talent tends to stick around.
Not every company gets all of this right all of the time. But what we have found in our Africa CEO Survey and in subsequent in-depth interviews is that agility in response to change, challenge and opportunity is the deciding factor between companies that thrive in Africa and those that are merely doing business.
What does agility mean in practice? When it comes to evaluating opportunities, it means not only understanding market dynamics as they are now, but also understanding the ability to see around the corner and anticipate changes in customer preferences and changes within economies that will drive growth. For example, we know from our survey that roughly a third of CEOs in Africa are focused on new product and service development, while another third say that organic growth in their existing domestic market is their main growth opportunity. The remaining third are split between organic growth in existing foreign markets, new foreign markets and new business relationships like mergers and acquisitions, joint ventures or strategic alliances.
To understand this better, we need to look at specific markets and industries. In Rwanda, for example, an overwhelming 73% of CEOs say that new product or service development is the main growth opportunity. Clare Akamanzi, Chief Executive Officer of Rwanda Development Board, tells us that ‘companies are responding to customer needs with new products and services that go beyond the conventional’.
The economy is becoming more sophisticated very rapidly, there is more competition between segments and ‘customers want to choose’, she says. Ms Akamanzi relates a story about a major multinational retailer with East African origins that stocked its shelves in Kigali with imported high-end products, and watched as they were snatched up in record time. The retailer had guessed right that Rwandans would want more choices, even if it meant paying a premium.