Navigating the strategic environments in Africa post-COVID-19

Abstract

Strategic managers and executive leaders have to navigate the contextual environment in which their businesses operate. To do so they are required to adapt to unexpected and changing conditions in order to absorb shocks that arise. During times of great social or economic turbulence, such as in the aftermath of the Covid 19 pandemic, global, regional and domestic conditions are in a state of unprecedented flux. In such environments, executives must employ heightened capabilities for strategic sensemaking and must develop adaptive strategic thinking. Yet, disruptive change can be overwhelming and constrain the quality of sensemaking and adaptation. In such situations, tools such as trend analysis, scenario planning and environmental scanning are ideally employed to assist executives to enhance their sensemaking faculties. This whitepaper employs these tools and examines the impact of the Covid-19 pandemic on the business environment in Sub Saharan Africa (SSA) through the prism of a series of country case studies, including; South Africa, Mauritius, Nigeria, Angola, Mali and Chad. Participants from across 10 African countries contributed to an expert elicitation as forming part of the research underpinning this paper. The study examined risks and possible opportunities likely to arise from the pandemic and how organisations and industries might respond to them strategically. The study finds that businesses operating on the African continent will be confronted with increased economic vulnerability in the coming decade due to the Covid-19 pandemic. It explores the strategic implications for businesses at various levels, including at the level of long-term global trade. It finds that Covid-19 will result in significant resource constraints for African states, who were already highly indebted before the Covid-19 pandemic. Simultaneously, the need for structural reforms across Africa is likely to create opportunities in agriculture, infrastructure and technology-enabled businesses and training, as African populations look for new ways to pursue their aspirations amidst these conditions. Taking advantage of the opportunities brought about by the structural changes precipitated by the pandemic will require the acceleration of a number of enablers of development. These will include; accelerating the implementation of AfCFTA, and the associated removal of red tape and barriers to trade, improving governance and addressing longstanding security concerns, as well as making critical investments in water and sanitation infrastructure. Businesses operating in this environment will need to navigate a diplomatic tightrope as Africa manages its relationships with global peers such as the United States, the European Union (EU) and the west generally; versus rapidly developing relations with China and Russia, who have growing military, geopolitical and commercial interests on the continent.