Margin gains to market expansion
HLB Survey of Business Leaders 2026 - Middle East & Africa outlook
Leaders across the Middle East and Africa enter 2026 with the most positive outlook among their global peers. Nearly three-quarters expect the rate of global economic growth to increase this year — a confidence grounded in recent performance rather than sentiment alone. According to the World Bank, GDP growth across the Gulf Cooperation Council reached 3.2% in 2025 and is expected to accelerate to 4.5% in 2026. Across Africa, growth held at 3.9% last year and is projected to edge up to 4.0% in 2026, despite mounting political and macroeconomic uncertainty.
Optimism, however, coexists with pressure. Inflation remains the dominant concern for 78% of leaders, closely followed by rising interest rates. Conditions vary sharply across the region. In the Gulf, inflation remains among the lowest globally, at under 2%. Elsewhere in MENA, average inflation reached 12.2% in 2025 and is forecast to ease to 10.3% in 2026. Across Africa, inflation averaged 13.7% last year and is expected to hover around 10.3% in 2026, though a growing number of countries are seeing more stable price dynamics.
Exchange rate volatility stands out as a more acute concern for MEA leaders than for their global peers. This reflects structural exposure rather than short-term market swings. Many economies remain sensitive to shifts in global liquidity, commodity prices and capital flows, particularly where foreign-currency borrowing remains prevalent.
New policy-led financial market development is increasingly acting as a stabilising force. According to the OMFIF Absa Africa Financial Markets Index 2025, market depth weakened in more than half of the surveyed economies amid tighter global liquidity. Yet reform-driven markets such as Namibia, Rwanda, and Malawi have made measurable progress through stronger primary dealer systems, new central securities depositories, and a broader range of instruments. These efforts are helping domestic debt markets act as buffers when external financing tightens and reduce reliance on foreign-currency borrowing.
Business confidence
of MEA leaders are very confident in their ability to grow revenues this year
Broader pressures continue to shape the operating environment. Trade disruption, cybersecurity risks and economic uncertainty remain elevated.
Yet confidence in execution remains high, with those surveyed displaying the highest global levels of conviction for business growth. More than half of companies increased profit margins by 5% or more over the past twelve months, an eight-percentage-point rise from last year.
Three priorities for business leaders in 2026
After a year of broad-based margin growth, MEA leaders enter 2026 from a position of strength. Their growth priorities now focus on scaling what works: expanding around customer demand, reinforcing operating models through technology, and sharpening their planning approaches.
Customer-led expansion
The Middle East and Africa benefit from rapidly expanding domestic and regional markets, supported by a young population, relatively low unemployment in key economies and rising disposable incomes, reinforced by sustained government-led investment.
As a result, half of the leaders plan to invest in new markets or segments over the next twelve months, making them 1.4 times more likely than global peers to pursue expansion-led growth.
Economic diversification is accelerating across the region. Many countries are reducing reliance on agriculture, commodities and basic goods, shifting towards higher value-added sectors such as tourism, retail, technology and financial services. In Saudi Arabia, the non-oil economy accounted for 55% of GDP in 2025. Under Vision 2030, the government aims to lift household spending on entertainment from 2.9% to 6%, creating a broad set of opportunities across leisure, culture and consumer services.
Qatar is pursuing a comparable strategy, centred on building an ecosystem spanning creativity, technology and experiential industries. In 2025, Brookfield partnered with Qai to launch a US $20 billion joint venture to develop AI infrastructure, positioning Qatar as a regional AI hub. Government efforts to attract international start-ups have intensified, with the Qatar Development Bank doubling its flagship funding packages for technology and high-growth ventures.
Partnerships play a central role in this expansion agenda. Seventy-one per cent of MEA leaders plan to increase investment in innovation partnerships in 2026, rising to 83% among profit accelerators. Collaboration is viewed less as risk-sharing and more as a way to accelerate capability-building and market access.
Across Africa, domestic consumption is emerging as an equally powerful growth engine, accounting for more than 60% of the continent’s GDP. Several local firms are already capitalising on this momentum. MTN Group’s move into streaming services and PalmPay’s expansion into new markets and adjacent financial products illustrate how companies are extending beyond their core offerings to capture rising consumer demand.
These growth initiatives are increasingly guided by a sharper focus on customers and their experience. “The most important thing I have learned [this year] is that customers highly value personalisation and convenience, preferring brands that understand their needs and make interactions seamless,” noted a leader from the technology sector.
To strengthen customer insight, local businesses are investing across multiple dimensions of customer experience. Efforts are spread almost evenly between developing new offerings through customer feedback, deepening customer knowledge through analytics, improving personalisation capabilities and training employees to deliver more consistent service.
“The importance of customer feedback cannot be underestimated,” said another leader from the technology sector. “It shows your customers that the company really cares about its products.” A leader from the financial sector echoed the point: “Customer feedback matters for strategising on how to meet their needs.”
The benefits of customer-centricity are already visible. BMW Group Middle East reported a 10% year-on-year increase in sales following targeted investments in customer experience, supported by the rollout of its Retail. Next concept across the regional retail network.
of leaders plan to adopt new technology in 2026 as an action for growth.
Technology remains central to this shift. Digital platforms, data analytics and automation are increasingly viewed as enablers of both superior customer experience and faster market expansion.
To that extent, 74% of leaders plan to increase investments in customer analytics and personalisation capabilities, and increase technology adoption in other areas.
Accelerating technology adoption
New technology adoption is the primary lever MEA leaders plan to use to drive growth in 2026. Digitisation across the region remains uneven, with some economies emerging as advanced technology hubs while others continue to face foundational infrastructure gaps.
In the Gulf, digital maturity is advancing rapidly. GSMA data places Qatar as the highest globally for enterprise use of AI, big data and private 5G networks. The United Arab Emirates leads in advanced deployment of cybersecurity, cloud computing, generative AI and edge computing. Both countries score higher on industry digital transformation maturity than the United States, the United Kingdom, Singapore and Japan, underlining the extent to which targeted public investment and regulatory coordination can accelerate adoption.
e& telecom is playing a leading role in strengthening the UAE’s digital infrastructure. Through the Sovereign Launchpad, developed with Amazon Web Services and the UAE Government’s Cyber Security Council, the initiative supports full data sovereignty and security, with a value exceeding US$1 billion and a projected contribution of more than US$181 billion to the digital economy by 2033. In parallel, e& is partnering with Qualcomm Technologies to deploy edge AI and next-generation 5G solutions across smart mobility, industrial IoT and advanced computing, supported by a new engineering centre in Abu Dhabi.
Egypt, in turn, has been expanding its international digital reach through new submarine cable projects, reinforcing its ambition to become a regional connectivity hub. At the same time, its data centre market has gained momentum, reaching an estimated value of US$278 million and attracting new operators such as Africa Data Centres and Khazna. Demand is being driven by cloud adoption and the growing integration of AI across enterprise systems.
AI in MEA
state that their top AI use case is for quality control
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Overall, MEA leaders are among the most active adopters of AI globally. They are significantly more likely than their global peers to be using AI in operations, with applications spread across both internal and customer-facing processes.
Despite this, significant digital gaps persist, such as in Sub-Saharan Africa where internet usage stands at around 38%, compared with 68% globally.
Business use of advanced technologies such as IoT also remains limited in several markets, reflecting constraints in connectivity, skills and capital.
Despite these challenges, innovation activity continues to build. Several African countries have developed vibrant start-up ecosystems, notably Nigeria, Kenya, South Africa, Egypt, Tunisia and Ghana. In 2025, African start-ups raised US$3.1 billion in funding, with Kenya leading, followed by South Africa and Egypt. Fintech attracted the largest share of investment, particularly in payments, merchant services and credit infrastructure.
Clean energy, climate finance and infrastructure-adjacent ventures also gained prominence, a notable shift, given that 67% of MEA leaders cite climate risk as a growing concern. The number increases to 81% amongst profit accelerators. Koolboks, a Nigeria- and France-based cleantech company, illustrates this trend. The firm has expanded its solar-powered freezer business across 25 African countries, deploying more than 10,000 units, with Nigeria as its largest market. The rates of investment into renewable energy have also been on the rise, both across the Middle East and the African continent, as more countries seek to diversify their energy mix.
While tech adoption is accelerating, leaders remain clear-eyed about internal constraints. Thirty-six per cent of MEA leaders say they need to address weaknesses in digital and AI capabilities, rising to 43% among companies whose profit margins stagnated or declined in 2025. By contrast, the most profitable firms are more concerned about gaps in cybersecurity, reflecting higher digital exposure and data intensity.
Strategic decision making
in the region use adaptive planning approaches as their top tactic for strategic decision making
Predominantly long-term thinking, however, does not imply rigidity. Most MEA leaders combine extended planning horizons with adaptive execution. A majority apply a dual approach that pairs comprehensive long-term planning with regular course correction as conditions shift.
Compared with global peers, they are also slightly more likely to rely on scenario planning and options analysis, allowing them to stress-test assumptions while retaining strategic direction.
As volatility persists, leaders increasingly recognise that better analytics underpin better strategy. It follows that most MEA companies plan to step up investment in data and analytics technologies over the next twelve months. In a region where growth rewards foresight as much as speed, the ability to combine long-term intent with timely adjustment is becoming a defining advantage.
How profit accelerators* stand out in Middle East & Africa
Profit accelerators in the Middle East and Africa are distinguished less by bold bets than by how deliberately they execute them. Their choices across planning, partnerships and technology point to a more confident and coordinated approach to growth.
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High ambition, with sharper focus. Profit accelerators in the Middle East and Africa are pursuing growth on multiple fronts. In 2026, they are simultaneously targeting operating efficiency, new technology adoption and expansion into new markets. What sets them apart is confidence in their existing product portfolios. Rather than overextending into constant reinvention, they are more likely to prioritise customer experience improvements and organic growth, signalling greater conviction in where value will be created.
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Growth through partnership and co-creation. Profit accelerators are more outward-looking in how they execute growth. They are significantly more likely to invest in innovative partnerships and are 1.5 times more likely than peers to involve customers directly in product co-creation and prototyping. Early customer involvement reduces execution risk, shortens feedback loops and improves product-market fit before scale investments are made.
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Cybersecurity is a priority. Higher digital maturity brings greater exposure to risk, and profit accelerators appear acutely aware of this trade-off. Cybersecurity is a stronger focus among this group, with firms 1.5 times more likely to increase spending on customer data security this year. Rather than viewing security purely as risk mitigation, they recognise its role in sustaining trust, protecting customer relationships and supporting more advanced digital experiences.
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Longer horizons, adaptive execution. Profit accelerators favour longer planning cycles. They are 1.6 times more likely to plan three years or more ahead than their peers, reflecting the scale and complexity of the transformations they are pursuing. Yet this does not translate into rigidity. In day-to-day operations, they rely on adaptive planning to the same extent as others, while placing greater emphasis on consensus-based decision-making to maintain alignment across initiatives.
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Analytics as a strategic advantage. Better data underpins these choices. Profit accelerators are more likely to view analytics as a priority for the year ahead, allocating additional investment to business intelligence, data visualisation and real-time and predictive analytics. With earlier signals and clearer insight, these firms are better positioned to adjust course, manage risk and convert strategic ambition into sustained performance.
*Profit accelerators are those who reported increased profit margins by five per cent or more over the past 12 months.
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