Global Firms Want To Up Investment In Africa

Companies doing business in Africa remain bullish on the continent’s potential, seemingly adopting a long-term view that requires them to be agile and responsive, and increase investment in fit-for-purpose technology.

- Natalie Greve

Economies in Southern, East and West Africa look set to benefit from increased international investment in the coming years, after 63% of companies polled as part of The Economist Corporate Network’s (ECN’s) 2017 African Business Outlook Survey (AfBOS) indicated their intention to boost investment spend in these regions.

The AfBOS, which in December 2016 surveyed over 150 senior executives responsible for their firms’ Africa based commercial operations, found that much of this investment would be channelled towards the digitalisation of their businesses over the next five year period.

“The importance of modern and appropriate technology to increase operational efficiencies, grow sales and serve customers better is recognised by firms with operations in Africa. Fifty-two percent of executives indicate that their firms will spend significantly more on digitalisation over the next five year period.

“A further 26% of executives indicate that their firms will invest somewhat more to increase digitalisation across their Africa-based operations. Only 2% of executives indicated their firms would spend less over the next five years on digitalisation,” says Herman Warren, ECN Africa director and author of the report.

Executives further indicate that they expect the Africa-sourced share of their organisations’ total revenue to increase markedly over the next five years.

Four percent of executives indicate that between 21% and 40% of their firms’ global revenue was sourced from Africa in 2016.

“However, by 2022, 10% of executives expect between 21% and 40% of their firms’ revenue to come from the region,” notes Warren.