…Governance, sustainability, key – PwC

The Africa Family Business Survey by PricewaterhouseCoopers (PwC) has identified tax reforms, succession planning, governance, and sustainability as principal forces shaping the next chapter of African family businesses.

Esiri Agbeyi, partner at PwC Nigeria and Africa family business leader, presented the findings at BusinessDay’s Family Business Summit held on Thursday in Lagos, describing it as a pulse check on the current state of family businesses and a practical snapshot of both the challenges they face and the opportunities available to them.

Agbeyi noted that the past three years have been characterised by economic volatility but observed signs of emerging stability, particularly in foreign exchange (FX) markets.

Now in its 12th edition, the PwC Family Business Survey is conducted biennially across multiple continents. This year’s dataset includes contributions from 79 African family businesses.

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The survey highlighted five global megatrends that are shaping the future of family businesses: climate change and sustainability, demographic shifts, social and wealth inequality, artificial intelligence (AI) and technological transformation, and economic volatility.

Agbeyi explained that while AI dominates discussions globally, African businesses remain primarily preoccupied with economic issues, particularly taxation and currency instability.

“For African businesses, economic issues tend to override innovation concerns,” she said. “The insight here is how we can maintain stability without losing focus on what matters: innovation and sustainability.”

Succession planning, leadership gaps

One of the most significant findings was that succession planning and access to capital remain the biggest challenges for African family enterprises.

The survey also found that leadership development and talent retention continue to pose difficulties, especially as younger generations push for modernisation. The report noted that resistance from older generations is beginning to ease.

“We are seeing more senior leaders embrace the idea of letting go,” she observed. “The ‘how’ remains a challenge, but it is progress.”

Access to capital, governance practices

African family businesses are largely reinvesting profits to finance growth, rather than relying on external funding.

Agbeyi, however, urged enterprises to diversify their sources of capital.

“Banks often complain about weak governance structures and incomplete records,” she explained. “But there are opportunities in strategic partnerships, government grants, and subsidies that can be explored.”

Governance tools remain underutilised. While wills are common, fewer businesses use shareholder agreements, dividend policies, or family constitutions, which are mechanisms that help preserve long-term objectives.

“Not many family businesses realise that these are the instruments that sustain both continuity and stability,” Agbeyi noted.

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Balancing long-term sustainability, short-term pressures

The PwC survey revealed that while family businesses understand the need to balance short-term risks with long-term goals, implementation remains inconsistent.

Agbeyi used the coffee value chain as an illustration, explaining that “the highest value is not in the beans but in the service, the retail experience.” She argued that Africa must evolve from resource-based to service-led economies, especially as AI reshapes manufacturing and service delivery.

“Traditional business models will change,” she said. “The economies that will thrive are those that can adapt quickly to this shift.”

Tax reforms, business implications

Tax emerged as a defining issue for African family enterprises. While most respondents said they were proud to “pay their fair share of taxes,” they also viewed taxation as a major business cost that must be strategically managed.

Agbeyi highlighted several ongoing tax reforms in Nigeria, including changes in the definition of tax residency, capital gains tax (CGT) adjustments, and new electronic invoicing rules.

“A foreign company can now be considered a Nigerian tax resident,” she explained. “If management and control happen here, it falls under Nigeria’s tax net. That means family businesses using offshore structures need to ensure proper governance and substance.”

She advised business owners to stay compliant with the Federal Inland Revenue Service (FIRS) e-invoicing system by 2026, warning that non-compliance could attract fines of up to N200,000 per transaction.

“Tax is no longer a cost line; it is a business issue,” Agbeyi concluded. “We must reframe conversations around how we manage capital, reward family members, and preserve value.”

Sustainability, legacy, community values

The survey found that African family businesses place a high premium on community impact and legacy preservation. Respondents cited “taking care of their communities” and “preserving family legacy” as their top motivations, even above financial performance.

However, Agbeyi cautioned that intent must be matched with institutional capacity.

“While the desire is strong, the structures to make it sustainable are still developing,” she said.

She also underscored the growing importance of environmental, social, and governance (ESG) considerations.

“For some, ESG feels like a soft topic, nice to hear but not nice to do,” she admitted. “But these are now key drivers of capital.”

Art, trusts, preservation of wealth

Closing her presentation, Agbeyi advised on asset management and estate planning, including art as an emerging asset class.

“Art is beautiful and valuable, but complex to value,” she remarked. “If you are transferring artwork into trusts or other structures, ensure proper valuation and rebasing. These details matter for compliance and wealth preservation.”

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Shifting mood

At the three-day event themed, ‘Wealth Diversification and Resilience in Uncertain Times,’ Frank Aigbogun, BusinessDay publisher, said the mood among business owners has shifted from anxiety to guarded optimism. “The theme resonates with resilience,” he said. “The clouds are clearing and we are beginning to confidently hope for something better ahead.”

Abiodun Azeez, country representative of Mauritius Commercial Bank, said family-owned firms remain the backbone of private wealth creation in Africa but still face structural weaknesses that limit continuity.

“In terms of generating wealth and employment in Africa, 80 percent of businesses are family-owned, but only about 30 percent move on to the second or third generation,” he said. He added that longevity now depends less on scale and more on adaptability.

Sam Abu, country senior partner at PwC Nigeria, said the summit aims to help family firms evolve from survival to sustainability. “Diversification, innovation, and deliberate planning will determine which family firms outlive their founders,” he said.