Economy
Business Growth High on African Boardroom Agenda
By Dipo Olowookere
Africa’s CEOs are confident that the outlook for business on the continent remains positive notwithstanding the unpredictable economic and socio-political climate.
PwC’s Africa Business Agenda report shows that 85 percent of African CEOs (Global: 85%) are confident in their own company’s prospects for revenue growth over the next 12 months.
Despite the fact that only 30% of CEOs in Africa (Global: 29%) believe the global economy will improve in the next year, no less than 97% (Global: 91%) are confident about the prospects for their own company’s growth in the medium term.
Hein Boegman, CEO for PwC Africa, says: “This level of optimism is the highest recorded since we started our research on Africa CEOs in 2012. However, in the past year we have seen a change in the outlook for some countries as external developments impact many of the drivers of Africa’s growth.
“As countries around the globe try to make sense of the increased levels of risk and uncertainty that have gripped the world, Africa needs to continue rising by capitalising on all the opportunities that lie ahead.”
The report suggests that one of the reasons for such optimism on the Africa continent is that CEOs have learned to look for the upside and seize on opportunities that may arise in the face of uncertainty. In the wake of climate of muted growth, CEOs have also acknowledged that while they focus on organic growth and cost reductions, they also need to prioritise investment in new strategic alliances and joint ventures to expand their markets and grow their customer bases. According to the survey, organic growth (Africa: 80%; Global: 79%) and new alliances (Africa: 69%; Global: 48%) are the top activities CEOs are planning in order to drive corporate growth or profitability.
The Agenda compiles results from 80 interviews with CEOs across 11 countries in Africa and includes insights from business. The results are benchmarked against the findings of PwC’s 20th Annual Global CEO survey of 1 379 CEOs in 79 countries conducted during the 4th quarter of 2016. The Agenda provides an in-depth analysis and insights into how businesses are adopting to meet the challenges of operating in Africa.
Notwithstanding the current climate and challenges, it is notable that there remains a significant amount of potential to unlock more growth on the continent. African CEOs are looking to international markets for opportunities, with the US (31%), China (28%) and the UK (24%) considered the top three countries for growth. Johannesburg (36%), Lagos (16%) and Cape Town (14%) are considered the top three African cities for growth opportunities.
Main risks to doing business in Africa
Although the returns for doing business on the continent can be high, so too can the risks. Africa’s CEOs are working in difficult times – finding the right talent for their business, dealing with hurdles that come with working with governments, and managing expansion plans across the continent.
In addition, infrastructure remains a challenge as it lags well behind that of the rest of the world. More than two-thirds of African CEOs (69%) are concerned about inadequate basic infrastructure (Global: 54%) and a stronger focus on expanding power supply is required to solve one of the biggest challenges in the business environment.
Other clouds on the business horizon include exchange rate volatility (Africa: 90%; Global: 70%); social instability (Africa: 85%; Global: 68%); geopolitical instability (Africa: 79%; Global: 74%); unemployment (Africa: 79%; Global: 45%); and climate change and environmental damage (Africa: 64%; Global: 50%). For most of these factors, the level of concern among African CEOs is higher than the global average. In addition, over-regulation features on the list of concerns this year, with almost half (46%) (Global: 42%) of African CEOs saying they are “extremely concerned”.
CEOs also believe social instability resulting from inequality, an increasing tax burden, a lack of economic diversity with an overdependence on natural resources, and corruption remain problems in many countries.
Globalisation
Overall, globalisation has benefitted connectivity, trade and mobility. However, just over half of African business leaders say globalisation has done nothing to promote equality, in particular in closing the gap between rich and poor – in fact, this gap may well be widening.
A number of CEOs think it is vital to address social challenges. CEOs believe the corporate community can assist in spreading the benefits of globalisation more widely. The majority say the best way is to collaborate, particularly with government. “While Africa’s potential is undoubted, its achievement remains in question. Business, government and civil society will need to work harder to turn potential into tangible gains against the backdrop of a rapidly changing world,” Dion Shango, CEO of PwC Southern Africa adds.
Talent and technology
The forces of globalisation and technology are increasingly transforming the workplace. Over half of African CEOs (53%) are exploring the benefits of humans and machines working together in the workplace. Over a third of African CEOs (36%) are considering the impact of artificial intelligence on future skills needs.
In some sectors, automation has already replaced some jobs entirely. “As automation takes deeper root in the workplace, companies in Africa will have to increasingly focus on achieving the right cognitive re-apportionment between man and machine,” Shango adds.
However, as CEOs develop their services, they are finding that human interaction in the workplace is still important and place the investment in talent as a top business priority. Just over half of African CEOs (51%) plan to increase their headcount in the next 12 months. Conversely, 23% plan to cut their company’s headcount over the coming year, with more than two-thirds of expected reductions being attributed to automation and other technologies.
According to the survey results, no less than 80% of African CEOs (Global: 77%) see the availability of key skills as the biggest threat to growth (ahead of volatile energy costs and cyber threats). They are finding it particularly difficult to source soft skills – adaptability, problem solving, creativity and leadership.
Technology & trust
Technology has brought about a number of advancements in efficiency and the ease of doing business in Africa. No less than 91% of African respondents (Global: 90%) believe technology has changed competition in their industry in the past five years.
While the digital era offers a host of opportunities, it also creates significant challenges and constraints in the arena of privacy and security. Organisations are holding increasingly large volumes of personal data about their customers, suppliers and employees. According to the survey results, 71% of African CEOs (Global: 61%) say they are concerned about cyber threats. Furthermore, the vast majority of African CEOs (93%) (Global: 91%) believe that cybersecurity breaches affecting personal information or critical systems will negatively impact stakeholder trust levels in their organisations in the next five years. A high 96% of business leaders are also concerned that IT outages and disruptions could impair trust in their respective industries over the next five years.
As disruptions gain more speed, the ability to ensure trust, security and privacy across all interactions will become critical to businesses’ competitiveness. But almost two-thirds of African CEOs (61%) (Global: 59%) are concerned that they are not prepared to respond to a crisis in their business, should one arise.
“In the face of economic and socio-political uncertainty, we remain confident that the outlook for business in Africa remains positive. But to succeed, businesses need to adapt swiftly to change,” Shango concludes.
By Aduragbemi Omiyale
President Bola Tinubu has signed the Investments and Securities Act (ISA) 2025 into law, repealing the Investments and Securities Act No. 29 of 2007
The enactment of the ISA 2025 reaffirms the authority of the Securities and Exchange Commission (SEC) as the apex regulatory authority of the Nigerian capital market. The new Act also introduces transformative provisions to further align Nigeria’s market operations with international best practices.
It strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The Director-General of the SEC, Mr Emomotimi Agama, lauded the President’s assent as a transformative step for the capital market.
“The ISA 2025 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently and reposition Nigeria as a competitive destination for local and foreign investments.
“We commend all stakeholders within and outside the capital market community for their unwavering solidarity towards the achievement of this historic milestone and solicit their continued collaboration in respect of the effective implementation of the ISA 2025 for the benefit of our economy,” he stated.
Business Post reports that the Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC retain its Signatory A status and enhancing the overall attractiveness of the Nigerian capital market.
Other notable provisions of the ISA 2025 include:
Classification of Exchanges and inclusion of provisions on Financial Market Infrastructures– The Act classifies Securities Exchanges into Composite and Non-composite Exchanges. A Composite Exchange is one in which all categories of securities and products can be listed and traded, while a Non-composite Exchange focuses on a singular type of security or product. There are also new provisions on Financial Market Infrastructures such as Central Counter Parties, Clearing Houses and Trade Depositories.
Expansion of the definition and Understanding of Securities – The Act explicitly recognises virtual/digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.
Comprehensive Insolvency Provisions for Financial Market Infrastructures – The Act introduces provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.
Management of Systemic Risk – The Act introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market.
Expansion of the Category of Issuers to the Public– The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act.
Legal Framework for Commodities Exchanges – The Act contains a new Part which provides for the regulation of Commodities Exchanges and Warehouse Receipts. These provisions are essential to allow for the development of the entire gamut of the Commodities ecosystem.
Issuance of Securities by Sub-Nationals and their Agencies– Salient provisions of the Act address existing restrictions in respect of raising of funds from the capital market by Sub-Nationals to allow for greater flexibility in this regard.
Transparency in Securities Transactions – The Act introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in the conduct of securities transactions.
Enforcement Against Illegal Investment Schemes – The Act expressly prohibits Ponzi Schemes and other unlawful investment schemes while prescribing stringent jail terms and other sanctions for the promoters of such schemes.
Strengthening the Investments and Securities Tribunal– The Act amends some key provisions in the repealed ISA 2007 pertaining to the Composition of the Tribunal, constitution of the Tribunal, qualification and appointment of the Chief Registrar as well as the jurisdiction of the Tribunal to enhance the ability of the Tribunal to optimally discharge its mandate.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited recovered 0.22 per cent on Friday despite sell-offs in the banking and the energy counters.
The banking index went down by 0.96 per cent, the energy industry depreciated by 0.35 per cent, the consumer goods sector tumbled by 0.20 per cent, and the commodity space declined by 0.17 per cent, while the insurance and industrial goods sectors improved by 0.09 per cent and 0.01 per cent, respectively.
The All-Share Index (AS) increased by 234.52 points to settle at 105,660.64 points compared with the preceding day’s 105,426.12 points, and the market capitalisation gained N147 billion to close at N66.257 trillion versus Thursday’s N66.110 trillion.
During the trading session, UPDC and Abbey Mortgage Bank appreciated by 10.00 per cent each to trade at N2.97 and N4.73 apiece, Northern Nigeria Flour Mills surged by 9.96 per cent to N87.75, Mutual Benefits jumped by 9.38 per cent to N1.05, and Royal Exchange soared by 8.25 per cent to N1.05.
Conversely, International Energy Insurance shed 10.00 per cent to close at N1.62, Africa Prudential declined by 10.00 per cent to crashed by N13.05, Cadbury Nigeria depreciated by 9.42 per cent to N23.55, UPDC REIT slumped by 9.09 per cent to N5.50, and RT Briscoe lost 7.69 per cent to finish at N2.40.
During the session, investors transacted 547.6 million stocks valued at N21.6 billion in 13,244 deals versus the 423.6 million stocks worth N9.2 billion traded in 11,393 deals on Thursday, implying a growth in the trading volume, value, and number of deals by 29.27 per cent, 134.78 per cent and 16.25 per cent, respectively.
Mutual Benefits was the most active equity after selling 73.9 million units for N77.5 million, Cutix traded 72.0 million units worth N179.1 million, GTCO transacted 67.9 million units valued at N4.6 billion, Fidelity Bank exchanged 47.6 million units worth N904.3 million, and Universal Insurance traded 33.0 million units valued at N19.7 million.
By Adedapo Adesanya
The Naira recorded its first relative gain against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) this week on Friday, March 28.
The domestic currency appreciated against the greenback by 65 Kobo or 0.04 per cent during the session to settle at N1,538.26/$1, in contrast to Thursday’s exchange rate of N1,538.91/$1 as the Central Bank of Nigeria (CBN) boosted forex liquidity to stabilize the market.
Over the last few sessions, the local currency had depreciated due to FX liquidity squeeze in the absence of interventions from the central bank.
So far, interventions in the market this month have neared $1 billion in a bid to strengthen the Nigerian currency.
However, the Naira lost against the British Pound Sterling in the official market yesterday by N1.00 to sell for N1,991.87/£1 versus the previous day’s N1,990.87/£1 and against the Euro, it declined by N1.40 to quote at N1,660.99/€1, in contrast to the preceding session’s value of N1,659.59/€1.
At the parallel market, the Nigerian Naira gained N5 against the US Dollar yesterday to close at N1,555/$1 compared with the preceding trading day’s value of N1,560/$1.
As for the cryptocurrency market, it was down on Friday amid a sell-off in US stocks due to poor economic data, with crypto-focused stocks also suffering heavy losses.
Continued macroeconomic woes weighed on the broader crypto market with the implementation of broad-scale US tariffs next week on April 2 by the administration of Mr Donald Trump, which compounded investor concerns across markets.
Ripple (XRP) lost 5.3 per cent to finish at $2.13, Solana (SOL) slumped by 4.8 per cent to trade at $126.89, Dogecoin (DOGE) slipped by 4.4 per cent to sell at $0.1755, and Binance Coin (BNB) depreciated by 4.2 per cent to $606.31.
Further, Litecoin (LTC) dropped 3.1 per cent to close at $86.21, Cardano (ADA) went down by 2.9 per cent to settle at $0.6869, Bitcoin (BTC) fell by 2.5 per cent to $83,699.86, and Ethereum (ETH) slid by 2.2 per cent to $1,877.62, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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