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Research shows optimism in Sub-Saharan Africa

A survey of more than 350 business leaders across five of Africa’s fastest growing economies reveals a high degree of optimism – 81% report that the business situation in their country is good or satisfactory, notwithstanding ongoing and well-documented challenges.

Produced by the Wheeler Institute for Business and Development at London Business School (LBS) in partnership with The Africa List, a membership community of Africa’s rising private sector leaders, ‘The Africa List Business Barometer’ aims to shed light on five economies that often go under-reported in global and African private sector studies.

The expansion and improvement of physical and digital infrastructure, and the growth of customer demand, are some of the principal reasons for this underlying business optimism and anticipated growth. This is despite enduring challenges within the economic environment and a pressing need for upskilling employees within the workforce.

The Africa List Business Barometer leverages the on-the-ground insights to offer thought-provoking perspective on subjects related to skills, leadership, and perspectives on how companies do ‘good’ beyond their bottom line.

357 business professionals operating in the Democratic Republic of Congo (DRC), Ethiopia, Tanzania, Uganda and Zambia answered questions on business confidence and investment, future economic conditions, finance, principal risks and opportunities.

While there are non-negligible differences across countries and industries, there is a generically strong optimism, with 87% of respondents predicting that the business environment will remain the same or improve over the next year. In addition, 85% intend to maintain or increase the level of investment in their business in the same period, translating their optimism into positive actions.

This optimism comes amid persistent challenges, including regulatory challenges and unstable political environments. For instance, although DRC’s respondents acknowledge the challenges of the political environment in the past year, they are the most positive about the improvement in business conditions in the year to come.

Skills shortages are identified as a constraint to growth, with nearly a third of participants expressing concerns in this area. In interviews conducted alongside the survey, respondents report channeling considerable investment into upskilling their workers.

Respondents were also asked how they feel companies can ‘do good’. From the selection of answers provided, the largest proportion feel that ‘creating employment’ is the primary way in which businesses can ‘do good’. This perspective features in 43% of answers.

Commentating on this aspect of the report, the co-Academic Director of the Wheeler Institute for Business and Development and the Tony and Maureen Wheeler Chair in Entrepreneurship and Marketing at LBS, Rajesh Chandy, said:

“In developed countries, ‘doing good’ is frequently characterised by good citizenship. In Africa, however, fundamental challenges such as the need for good jobs, poverty alleviation, and addressing the dearth of healthcare and education opportunities, means that companies that provide good quality jobs, training and facilities, will rank highly as examples of good work for employees and communities.”

Elias Papaioannou, co-Academic Director of the Wheeler Institute for Business and Development and Professor of Economics at LBS and Hal Varian Visiting Professor of Economics at the MIT Department of Economics commended the report for offering a practical and accessible resource with which to stimulate and inform discussion:

“For Africa to enter a sustainable development path, its businesses need to flourish. While governments, local and foreign, and international institutions have a crucial role to play, African entrepreneurs, business leaders, and innovators will spur employment, investment, and opportunity. It is vital that Africa maintains the successes of the past decades and does not revert to another period of conflict, mismanagement, and authoritarianism. It is therefore encouraging that the views of the business leaders recorded by The Africa List Business Barometer are optimistic, even when operating in challenging environments.”