Navigating volatility, AI integration, and regional confidence in African businesses

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SIMON BROWN: I’m chatting with Frank Blackmore, lead economist at KPMG, talking about the KPMG Africa CEO Outlook for 2026.

Frank, I appreciate the time. When I kick off, 86% of CEOs across the continent grew revenue last year; 72% are confident in their home economies. That’s higher than their confidence in the global economy. Is this home bias? Is this worries around global geopolitical concerns, or am I just reading too much into it, perhaps?

FRANK BLACKMORE: I think it’s a confluence of many things. The feedback we’ve received from the CEOs is that the world has changed in the way it works. We were hit with Covid, then the war in the Ukraine.

That was followed by an inflationary bump, supply-chain issues, another war, Trump tariffs – this here of course – the Middle East, and fuel energy price disruptions.

But what the CEOs were saying is, when they were speaking about Covid and even the war and the increasing prices then of energy, that there would be contraction in countries. Things wouldn’t go ahead.

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That didn’t turn out to be the case. Economies were fairly resilient and allowed you to continue growing your businesses, especially on the African continent. And that has just become a more comfortable environment for a lot of these CEOs to work in.

I think that’s what we’re seeing here, along with obviously better prospects for African business in general. There’s a lot more going on on the continent.

SIMON BROWN: And when you list it, starting with Covid, it is a surprisingly long list for a mere six-and-a-half-year period. They also – 58% – expect earnings growth of at least 2.5% over the next three years; that’s per year.

But it seems a low bar. Is that just a sort of base and they’re hoping for better, or are they struggling to really get down to the bottom line?

FRANK BLACKMORE: So I think it is a base, because if I take a look at the operational priorities of African CEOs, number one on that is organic growth.

That tells you most CEOs in Africa are saying: ‘There’s much more out there that we could be doing. Let’s concentrate on organic growth to get some of that coming in.’

Along with that are things like improving customer experience. Africa is a diverse place. When you touch the consumer – whether through advertising, through physical relationships or online relationships – this could be done better in Africa and be more focused on the people. That’s another focus area.

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And then the last one is of course increased use of digitalisation and connectivity across the business. So it gives you kind of more reach, more bang for your buck. All those three are their top operational priorities and they all tell me one thing – that there is a large desire to grow their businesses.

SIMON BROWN: That then brings me to AI, with 72% saying it’s the top investment priority. Only 14% think they’re keeping pace, as opposed to globally where the number is two-thirds. Is this a skills issue or is this data or even infrastructure? I’m thinking power, I’m thinking cost of compute. Where is the friction that they’re finding there?

FRANK BLACKMORE: I think all of those. So again the feedback from CEOs is you only have a certain budget available to you; what do you spend it on within the organisation?

So these are, for example, the top three threats that they’re bringing up: Cybersecurity, data security on the one side, and on the other integration of AI into the organisation.

The one is defensive; do we use it there first, or do we use it for the growth parts of the business? There’s only so much budget available. And then, as you said as well, the energy concerns.

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So there’s a lot of thinking also here towards alternative energy – whether they’re going to be looking to diversifying their energy sources. So that’s part of the issue as well. But I don’t think it’s as simple as they want to do X, but they can’t get to that point. Of course, there’s also the skills aspect, and that was highlighted in this report as well.

SIMON BROWN: I really want to touch on that, because of all this AI talk. And then the vast majority, 84%, expect headcount to grow, which for a continent of young people – and South Africa in particular, a country of high unemployment – that’s a hugely important component where AI is important. But actually so is headcount. That seems contradictory, but not necessarily at all so.

FRANK BLACKMORE: No. And I think the way most CEOs are seeing it now in Africa – and around the rest of the world as well – from this survey is there’s going to be reskilling and repositioning of people.

They don’t want to lose people who already understand the business, who are already part of that business.

But if they can bring in a tool to augment a simple repetitive task, and can reskill people in sort of more valuable areas, that is the view that they’re taking these days, along with obviously hiring more people that are tech-savvy, AI-type savvy people in order to be able to run that infrastructure in the background.

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SIMON BROWN: Yes, and using AI in many cases to do the boring necessary grunt work and let us get on with the real value. We are obviously in South Africa; we’re talking from South Africa.

So my final question is: It’s a continental survey, of course, but where does South Africa sit within it? How are South African CEOs in terms of confidence relative to their peers – and Nigeria, Kenya, Morocco and the like?

FRANK BLACKMORE: Ironically we had the highest confidence of any region in Africa. Ninety percent of CEOs had confidence in the region. That also tells me a lot of strategy was kind of intra-African trade, regional type of trade – and obviously that was spurring that confidence, was supporting a lot of that confidence.

We are also concerned with things like supply-chain end-to-end visibility. We know supply chains disrupt the business and there’s a lot of focus in southern Africa on that end-to-end. What’s actually happening, where are my goods at each point in time?

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Actually that’s an investment area on the operational side for southern African businesses in order to understand that better. It goes along with things like risk management, strategic foresight and faster decision making, which are priorities that underpin the growth narrative of Southern Africa.

SIMON BROWN: But great to see us confident. We’ll leave it at that. Frank Blackmore, lead economist at KPMG, always appreciate the time.

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