Most major corporations struggle with developing a business strategy that works. Fifty percent of business leaders don’t believe they have a winning strategy to begin with and almost all report missing major opportunities in the market.

About two-thirds of business executives say that their company’s capabilities don’t support the way they create value in the market. And 80% of senior executives say that their overall strategy is not well understood – even within their own company.

These problems are not caused by external forces. They are the outcome of the way most companies are managed. These are some of the findings of ongoing global research on senior executives carried out by Strategy&, PwC’s strategy consulting capability.

Jorge Camarate, Strategy& Partner, says: “Worldwide and across the African continent we are seeing companies battle with how to develop strategies that keep them competitive in an increasingly complex global marketplace. All too often companies don’t think about strategy and execution together.

“We have a number of business leaders who understand this problem, but very few who know how to overcome this.”

There are few companies that are able to successfully close the gap between their strategy and their execution. Those companies that are successful – referred to as ‘coherent’ companies – are the ones that are able to bridge this strategy-to-execution gap by applying the unique capabilities that distinguish them from their peers.

Coherent companies usually have the ability to align their value proposition with their distinctive capabilities and their portfolio of products and services. These elements shape a company’s identity, culture and approach to managing resources.

In the process, we see the following acts of unconventional leadership as being of fundamental importance:

1. Commit to an identity: A true identity expresses what a company does best and why it matters. Choosing and developing an identity requires some reflection, where your company can go in the market- what products and services you can offer and to whom – is a function of who you are and what you do well. Companies should only compete in those markets where they believe their identity and distinctive capabilities will give them the edge over their competitors.

2. Translate the strategic into the everyday: In order to achieve its targeted identity, an organisation must create a blueprint of its capabilities. It must integrate diverse processes and technologies while preserving the strategic value of the enterprise.

3. Put culture to work: An organisation’s culture is multidimensional, complex and influential. Most business leaders understand the power of a company’s culture – but it’s not always clear how to harness that culture. A company’s culture should reinforce the distinctive capabilities and strengths that differentiate it from the competition. Africa poses some challenges when it comes to culture, as labour markets usually lack people with the necessary technical skills and relevant industry experience.

Consequently, companies have to develop their own talent. Since relying heavily on expatriates is not financially sustainable or positively viewed by African governments, finding local human capital is essential.

4. Cut costs to grow stronger: Coherent companies tend to invest heavily in activities that support their identity and distinctive capabilities. They will need to regard costs as an investment and focus on investing in those areas that are necessary for executing strategy. In middle-income African countries with strong institutions, aspirational customers demand premium products and services – but these need to be delivered at a lower cost point.

5. Shape the future: Coherent companies acknowledge that their value proposition is never fully achieved and their capabilities system should always be open for further progression.

Although the African continent offers much potential for investors, it also carries a number of risks and challenges. “It takes a coherent company to successfully and sustainably close the gap between strategy and execution in Africa. Conventional leadership practices of seeking growth at all costs have resulted in many unsuccessful attempts at penetrating this market.

“Coherent companies, on the other hand, improve the likelihood of successful expansion and strategy execution in one of the fastest-growing regions in the world,” concludes Camarate.

Nearly one in three citizens who tried to access basic public services in the Middle East and North Africa paid a bribe, a Transparency International report said today, showing that governments across the region have failed to hear their citizens’ voices against corruption.

According to a public opinion survey by the international anti-corruption group of nearly 11,000 adults in 9 countries and territories, the majority of people (61 per cent) across the region think that the level of corruption has gone up over the last 12 months. The 30 percent who paid a bribe for a basic service represent the equivalent of nearly 50 million.

“It’s as if the Arab Spring never happened. Leaders who fail to stop secrecy, fail to promote free speech and fail to stop bribery also fail to bring dignity to the daily lives of people living in the Middle East and North Africa. Peoples’ human rights are seriously affected,” said José Ugaz, Chair of Transparency International.

Public dissatisfaction with corrupt leaders and regimes was a key catalyst for change in region, notably with Arab Spring protests. Five years on, the survey finds governments have done little to enforce laws against corruption and bribery, nor have they done enough for transparency and accountability through the promotion of freedoms of the press, civil society and for individuals.

In Lebanon, numbers are alarming as nine in ten people (92 per cent) say that they think corruption has increased.

Government officials, tax officials and members of parliament are perceived to be the most corrupt groups in the region.

Based on the findings of the survey, here are our four top recommendations:

· Governments in the region must speak out immediately and publicly about their commitment to end corruption. They must also finally deliver on their anti-corruption commitments made globally and regionally, such as under the United Nations Convention against Corruption (UNCAC) and the Arabic Convention for Combating Corruption.

· Governments must eradicate impunity and bring the corrupt to justice so they can take responsibility for the consequences of their acts.

· Governments must create a safe and enabling environment for civil society and the media to fight and report corruption.

· Governments must involve their citizens in the fight against corruption and create the space to hold institutions to account and to help law enforcement institutions. This is especially important when the majority of citizens (58 per cent) believe they have the power to make a difference.

Growth lowest in 15 years, with significant variation across region
Severe shocks: weak commodity prices, tight external financing, drought
Urgent need to reset policies to secure growth

After a prolonged period of strong economic growth, sub-Saharan Africa is set to experience a second difficult year as the region is hit by multiple shocks, the IMF said in its latest Regional Economic Outlook for Sub-Saharan Africa

The steep decline in commodity prices and tighter financing conditions have put many large economies under severe strain, and the new report calls for a stronger policy response to counter the effect of these shocks and secure the region’s growth potential.

The report shows growth fell to 3½ percent in 2015, the lowest level in 15 years. Growth this year is expected to slow further to 3 percent, well below the 6 percent average over the last decade, and barely above population growth.

Hit by several shocks
The commodity price slump has hit many of the largest sub-Saharan African economies hard. While oil prices have recovered somewhat compared to the beginning of the year, they are still more than 60 percent below 2013 peak levels—a shock of unprecedented magnitude.

Monique Newiak
IMF African Department

– Robert Orya

Year 2020 is forty-four months away. According to the 2009 perspective planning of the National Planning Commission, the Vision 20:2020, the country’s GDP is projected to reach $900 billion by 2020.

That would rank Nigeria as one of the top 20 economies of the world.

My estimate is that Nigeria’s GDP reached $588 billion in 2015, based on the World Bank estimate of $569 billion in 2014 and 3.3% growth rate of 2015. This already makes Nigeria the world’s 21st largest economy. From its 22nd position in 2014, Nigeria leapfrogged Sweden last year.

But I’m afraid, the current GDP growth estimate of 5 percent average between now and 2020 would not see Nigeria rise above Switzerland (the world’s 20th largest economy) whose GDP was $701 billion in 2014, and growing at around 1.9 percent.

With that, Nigeria’s sceptical brigade would like to sound the death knell of another economic target which the government had dared to enact but became unrealisable. But Nigeria’s economic potential has not diminished.

With a longer time horizon, Nigeria’s economic stature would confound the sceptics.

PricewaterhouseCoopers (PwC) has just released a report that projects Nigeria to become one of the 10 largest economies of the world by 2050. Economic diversification and high growth rate would accelerate the GDP to $6.4 trillion by 2050, according to PwC’s The World in 2050: Will the shift in global economic power continue?

This means Nigeria would ultimately leapfrog United Kingdom and France – the current fifth and sixth world’s largest economies, respectively. UK’s GDP was estimated at $2.99 trillion in 2014, while France was $2.83 trillion. Both countries are likely to continue to grow at less than half the rate of Nigeria’s expansion.

This might sound outlandish at the moment, but that would be to those who have not been keenly observing the shift that had begun to take place in the world economy before the last global financial meltdown and in its aftermath.

Collectively, the traditional economic powerhouses have been growing at a very slow pace. The emerging economies, notably China, had plugged the global growth gap until recently. The next decades would see the frontier markets – chiefly Nigeria, Indonesia, South Korea and Mexico – and the next emerging market giant, India, intensify the shift in the global economic power.

Nigeria’s place amongst the world’s biggest economies is affirmed by the breadth and depth of economic potentials of the country. It is instructive that PwC’s radical projection of Nigeria’s economy came at a period of low oil prices.

This confirms the open secret that Nigeria is far more than an oil economy. The potentials of the country actually lie in the non-oil sectors, which remain largely untapped.

President Muhammadu Buhari recently identified to the meeting of the National Economic Council the sectors that his Administration would be focusing on for the transformation of Nigeria’s economy. These are agriculture, manufacturing, power, healthcare and housing. He also mentioned the transformational impact of education, science and technology.

These sectors spell out the key role of government in Nigeria’s economic transition, from potentials to greatness.

A direct interventional role by government, and Nigeria’s ability to attract private investment, are critical to the realisation of the potentials across what could be classified as the key business and social sectors of focus by President Buhari. Therefore, certain policy imperatives immediately come into reckoning.

The first of three policy imperatives is formalisation of the informal sectors. There remains a lot of work to be done with regard to the formalisation of both production and trade activities in as many as four of the five sectors of focus by the Administration. Top on the list is agriculture, where much of the activities are off the radar of fiscal operations.

In as much as Nigeria’s housing deficit is driven by rural-urban migration, the presence of urban slums and unplanned housing in the suburban and rural areas shows the degree of informalisation in the housing sector. And slow uptick in formal health sector growth, juxtaposed to high population growth rate, is seeing growing informal healthcare provisioning which might not be safe and is also difficult to account for in economic measurement. Informal activities, especially trade, are also very present in the manufacturing value chain.

We have to devise a plan to bring “enlightened capital” to these sectors to overcome the challenge of informality. Here, the planned investment in infrastructure can open the pathway for critical mass skilled human capital and sophisticated finance in these sectors.

This might look straight forward, but definitely it is not a simple solution to come by. Our ability to mobilise enlightened capital into our informal sectors would be proof positive of the adequacy of our strategies and implementation.

Formalisation of the economy is the next step after the rebasing of the GDP in 2014. The rebased GDP has provided a wider economic canvass for engineering growth. Formalisation would help capitalise these sectors and generate tax revenue for government to fund its fiscal operations, including social programmes.

The second imperative is performance of public institutions and public investments. Government parastatals just have to become business-like. This is not limited to adapting private sector ethos of performance engineering and measurement, although it is the less controversial aspect of it.

Without necessarily wanting to stire the hornet’s nest, government’s commercial and revenue-generating institutions have to reach for higher levels of top line and bottom line performances. Whether or not we believe government has any involvement in business, it already does. Therefore, the institutions must operate optimally and support the Government in improving the economy.

Chinese state-owned enterprises have been part and parcel of the country’s growth story. While the Chinese SOEs seem to struggle right now with the transition to a more open and private sector-led growth model, the role they played in revenue mobilisation, local investment finance and overseas investment outreach cannot be easily discountenanced.

With regard to public investment, infrastructure is catalytic. President Buhari has raised hope on this with the size of the capital investment in the 2016 budget.

Infrastructures are ineludible signposts of development. However, in present day Nigeria, they would be a lot more than that. Delivery of key infrastructure would inspire private sector investment and significantly ease the burden of doing business.

The high capital allocation in the budget in an environment of government’s anticorruption agenda can serve as a boon for the development of the infrastructures to propel Nigerian economic growth.

The third imperative is a focus on developing the regulatory institutions. Two reasons for this stand out. One is that rising business sophistication is conterminous with high growth economies. Sophisticated market instruments are increasingly deployed in the local market as foreign investments become part and parcel of the local growth story.

The regulatory agencies cannot operate behind the curve of economic sophistication; ideally, they should provide the lead, or at worse keep pace with market complexities.

The second reason is identifiable in the on-going efforts to have agreement on the fine of MTN Nigeria by the Nigerian Communication Commission.

Nigerian businesses are growing into behemoths, and multinational and transnational corporations are expected to continue to latch on the Nigerian growth in the foreseeable future in which we would attain global economic status.

These large corporations exercise immense power of lobby. They sometimes can out-muscle local regulators. Even the most advanced economies struggle to enact policies and implement them due to the lobby by the big corporations.

To minimise the risk of the corporations overrunning the regulators, we have to start to strengthen our regulatory institutions today.

Years of inadequate policy and governance have only delayed the transformation of Nigeria into a global, top-ranked economy. But this transformation is inevitable, given the consumption capacity of our large population and our human and resource endowments.

From all indications, we are getting closer to the inflection point of this economic destiny. The shift in global economic dynamic is in favour of Nigeria, and we are on our way to the top. We have to believe it and we have to act it.

– Roberts U. Orya, Former Managing Director/Chief Executive Officer, Nigerian Export – Import Bank