African business survey 2009
Africa economies are ahead of 2010
Written by Devapriyo Das, found Wednesday,
30 December 2009 at observer.ug
African
business survey 2009- Africa economies are ahead of 2010 The africa practice
annual business survey review 2009 reveals that Africa's economies are on the
upswing, and can expect to recover from the effects of the global financial
crisis in 2010. However, low access to credit, insufficient skilled labour,
rickety infrastructure and poor legislation will continue to plague the business
environment.
The survey was conducted in November 2009. It polled 37 business leaders who had
invested in Africa, in the banking, beverages, media, mining, private equity and
telecoms sectors. About 83% of the respondents expect increased Foreign Direct
Investment (FDI) flows from China in 2010; 69% had predicted reduced FDI flows
in 2009. The forthcoming FIFA World Cup is also expected to boost revenues, but
over half of those polled believe that South Africa alone will benefit from it.
By contrast, more than one third believe US President Barack Obama's
administrative policies towards the continent will not change as the USA is
disinterested in Africa, and that its economic impact here will not be
significant. Africapractice is a strategic communications consultancy with
offices around Africa.
Product and market diversification, particularly a shift away from export-led
growth towards intra-African trade are expected to be key drivers for
private-sector led growth. This complements the respondents' view that advances
in information and communications technologies, rather than politics, will aid
business opportunities.
Only 5% of respondents believed that political instability would pose a threat
to business, but 35% believe the lack of talented labour would be their biggest
challenge. This points to the growing skills gap in Africa, as many of the
continent's nations are home to growing populations, the majority of whose
citizens are under 25 years old, and have limited prospects for competitive
education and vocational training. Still, 68% of leaders expect to significantly
expand their operations in 2010.
The perceived low impact of local politics is a noteworthy development on the
continent, especially given that elections – some potentially explosive- are
upcoming in Ethiopia, Burkina Faso, Rwanda, South Sudan, and Uganda, among
others. 16% of respondents, do however, view the East African Community Customs
Union as a significant development for African business in 2010.
Agriculture, mobile telephony, internet and tech-based industries remain growth
sectors; but big investments, perhaps from overseas will have to be mobilised to
see them deliver their potential.
Business leaders surveyed were of the opinion that the technology sector could
not grow given the existing state of infrastructure and energy.
Reducing cash dependency, accelerating flow of money through African economies
and updating exchange controls were also on leaders' wish-list for 2010. They
believe that access to financial services by the unbanked rural and urban poor
in particular, will be essential to poverty reduction.
das@observer.ug
african business survey