SA CEOs focus on the controllables to drive growth

Published Nov 19, 2023


By Ignatius Sehoole

Despite escalating uncertainty, rising global risks and economic challenges in southern Africa, CEOs remain overwhelmingly positive amid numerous opportunities to explore growth through the prevailing complexity.

According to the KPMG 2023 CEO Outlook Survey – Southern Africa Edition, 90% of South African CEOs surveyed indicated they were confident in their company’s growth prospects.

In addition, 96% of South African CEOs expect earnings to increase over the next three years, with the majority (63%) forecasting earnings growth of 2.5 to 5%.

Compiled in partnership with Business Leadership South Africa, the report combines perspectives from 60 predominantly South African CEOs with insights from the Global KPMG CEO Outlook Survey, which surveyed 1 325 CEOs across 11 markets.

While sector- and country-specific risks vary, CEOs remain confident in the future of the global economy. In southern Africa, the region retains significant long-term potential, with a growing human capital advantage, access to abundant mineral and natural resources, and pockets of excellence in institutions and infrastructure.

Based on feedback from respondents, CEOs plan to focus on the factors under their control to drive growth by prioritising internal and external collaboration to improve resilience, and exploit organic growth prospects in lieu of deal-making opportunities in response to global uncertainty and risk-averse capital markets.

Amid this reset in strategic thinking, advancing digitisation and leveraging emerging technologies were identified as key investment priorities for CEOs across southern Africa, with a focus on generative AI – 71% of regional CEOs are making GenAI an investment priority.

Due to the risks posed by disruptive technology, CEOs understand that they need to capitalise on AI frameworks and emerging technologies to operate in tomorrow’s markets by co-finding innovative ways to complement what exists in business, and improve it, while considering ethical aspect of this phenomenon.

However, business leaders will need to temper the innovation-driven technology roadmaps with risk mitigation strategies to address potential cybersecurity-related threats.

Additional investment priorities highlighted by southern African CEOs include governance models and transparency protocols, addressing environmental challenges and focusing on diversity, equity, and inclusion (DEI).

From a talent and human resource management perspective, CEOs are embracing a more inclusive approach related to remote, return-to-office, or hybrid working arrangements in response to pandemic-influenced workplace trends.

With talent viewed as an important driver of growth and performance, leaders must acknowledge and respond to what matters to employees, and the workforce and support and nurture workers through shared management and operational responsibilities during this politically, socially and economically unpredictable time.

Furthermore, CEOs acknowledged the imperative role ESG will play in corporate and growth strategies, due largely to the impact it bears on brand reputation, customer relationships and employees.

Global and southern African CEOs understand the connection that exists between a strong ESG strategy and positive financial performance. As such, ESG is a growing business focus area, as is DEI.

CEOs believe that the public is looking for businesses to fill the void in various societal issues, including diversity and inclusion within the workplace, with achieving gender equality in the C-Suite deemed a critical determining factor to future success.

However, CEOs understand that challenges related to available skills and the costs and complexity associated with decarbonisation mean that investments in the areas will take up to five years to deliver growth and value.

Despite the challenges, South African CEOs remain undeterred in their bullish stance on growth. Findings from the KPMG 2023 CEO Outlook Survey affirm that they are not only trying to understand how to operate in tomorrow’s market, but determine how they can capitalise on new technologies, while nurturing their workforce and ensuring their ESG initiatives gain traction.

Ignatius Sehoole is the CEO of KPMG in southern Africa.