EXECUTIVES in sub-Saharan Africa rate unemployment and underemployment as the top risks for doing business in the region, followed by challenges related to governance, energy prices, infrastructure, and debt.
This is according to the finding of a new analysis of regional risks by the World Economic Forum published on Tuesday. The forum said the Sub-Saharan Africa Risks Landscape comes at a time of modest economic growth across the region. This is set against a backdrop of rapid population and labour-force growth that is outstripping job creation.
As the number two risk facing Africa’s business leaders, governance comes into focus at a time when Africa appears to be consolidating recent progress towards stability.
The region has experienced 27 leadership changes since 2015, highlighting a continent-wide push for greater accountability and democracy. The report also noted that the region experienced 15 elections in 2018 and will see a further 20 in 2019.
The focus on jobs and governance is preventing business leaders from being able to tackle longer-term challenges such as climate change and health. This could be a potential blind spot in terms of long-term planning.
It has been estimated that as much as 48 percent of the region’s gross domestic product (GDP) will be vulnerable to extreme climate patterns by 2023. The analysis draws on data from the forum’s global risks perception survey 2018-2019 that polled 916 experts and decision-makers around the world. It also uses responses from the forum’s executive opinion survey 2018, which polled 12,548 business leaders across the globe, including those in 34 sub-Saharan countries.
‘Sub-Saharan Africa is seeing social and economic growth, however it is clear that job creation needs to accelerate in order to absorb the rising labour market. Failure to tackle this will jeopardise the substantial political and societal progress that has been made in the region,’ said Emilio Franco, head of global risks and geopolitical agenda at the World Economic Forum.
‘Climate change and health-related risks represent a potential blind spot for business. These issues could significantly exacerbate traditional economic risks,’ added Franco.
The Sub-Saharan Africa Risks Landscape is published in partnership with Marsh & McLennan Companies and Zurich Insurance Group.
The analysis is released as global and regional leaders gather in Cape Town, for the 28th World Economic Forum on Africa, which is set to take place at the Cape Town International Convention Centre (CTICC) September 4-6.
The meeting will tackle many of the issues addressed in the analysis by focusing on how to scale up the transformation of regional architecture related to investment, industry and innovation.