Africa's role in the global economy has continued to expand and deepen and it has been more resilient than many areas of the world during the global economic crisis. But the future of growth in Africa has much more to do with opportunities here that are regional and industry-specific. At PwC, we understand the potential in our markets and we help a wide variety of local, regional and global clients to thrive in this environment. The Africa Business Agenda enables us to share high-level insights with you from a variety of viewpoints, to help you succeed in one of the world's fast-evolving growth frontiers.
As we see it, three main factors have helped to position sub-Saharan Africa for future growth: improved economic fundamentals and policies, shifting trade and capital flows and domestic demand, both regional and country-specific. In this publication, you'll find that our survey of over 200 CEOs in Africa and scores of in-depth interactions with leaders in business and government support this view.
The Agenda shows that investors are looking for growth opportunities in an environment of economic stability. Africa continues to impress: 75% of business leaders in our Global CEO Survey expect their operations across the continent to grow over the next 12 months, while over 90% of CEOs in Africa expect their businesses to grow.
CEOs in Africa are also significantly more optimistic than CEOs globally about the future of free international trade and cross-border capital flows. Stable monetary and fiscal policies across economic cycles are providing greater protection from future fluctuations and encouraging trade and capital flows in Africa.
To better understand the information contained within these pages, it's useful to put the African operating environment in context. Agribusiness, financial services, consumer goods, infrastructure and telecommunications are major growth sectors for consumption as well as employment. Africa's population of almost one billion is young and urbanising and consuming an increasingly sophisticated array of products and services, many of them innovative and responsive to the specific needs of our markets.
At the regional level, the Southern Africa economy is largely dominated by Africa's largest market, South Africa, which has remained stable, supported by relatively low interest rates and a growing mining industry. Leading South African players in mining, hospitality, financial services, retail, IT and telecommunications are actively expanding operations into the rest of sub-Saharan Africa. Consumers in other Southern Africa markets are increasingly demanding services and products in the banking, insurance and telecommunications sectors.
In West Africa, the Economic Community of West African States (ECOWAS) has helped to facilitate intra-community road networks and telecommunications as well as diplomatic progress, brokering peace in many of the region's more unstable economies. The oil and gas industry has enjoyed distinct regional success in West Africa by contributing to high economic growth and demand for construction and retail and telecommunications services. Nigeria, Ghana and Angola present strong opportunities, based upon their historic growth rates and future projections.
The East African community is one of Africa's strongest trade blocs, effectively facilitating regional trade flows and improving the region's competitiveness and reducing barriers to investment. Regional trade has increased around 50% since the Customs Union protocol came into force six years ago. Economies in East Africa are growing rapidly and while businesses are exposed to risks like fluctuating exchange rates and inflation, business confidence remains high particularly among manufacturers and service providers. Many businesses in East Africa already operate regionally.
The recent discovery of oil in Northern Kenya and offshore gas fields in Tanzania combined with Uganda's oil reserves in the Lake Albert basin contribute to massive potential for the region. Further, growth opportunities exist in transformation activities among regional governments as they implement ambitious and well-designed long-term development plans.
Recognising that investment flows into the continent's markets are increasing alongside a growing number of funds focused on the region, Africa's stock exchanges are taking steps to promote regional investment. The JSE Securities Exchange in Johannesburg recently announced a strategic shift to facilitate investment in JSE-listed Africa stocks, thereby making it easier for these companies to raise capital. Meanwhile, the Nairobi Stock Exchange, Uganda Securities Exchange and Dar es Salaam Exchange have established a working relationship between exchanges with the objective of promoting simultaneous public issues of securities and attracting regional flows of capital to the member states of the East African Community.
No analysis of Africa is complete without recognising the challenges that exist in the region. Social, economic and political instability are threats to short and medium term growth in many markets and they have played a part in preventing investment and trade from reaching their full potential. Investors and business leaders need more assurance of a stable operating environment. Nearly 80% of CEOs in Africa cite uncertain or volatile economic growth as a threat and they say that regulatory and tax policy must be more conducive to business. Our survey shows that 71% of CEOs in Africa view the tax burden as a risk to growth and 40% say that changes in regulation are driving strategy change. The key challenge for the region is to convert opportunity into strong, sustained and shared growth.
Growth in Africa is happening in individual markets and geographic regions, within specific industry sectors and influenced by demographic changes. This is a complex and diverse continent requiring layers of insight, and The Agenda provides a deep level of insight from multiple perspectives. I hope you find it useful and as always, we look forward to your feedback and comments.