The International Finance Corporation (IFC) has called on family-owned businesses to prioritise succession planning and strengthen governance structures to ensure their long-term sustainability and continued contribution to economic development.
Speaking at the Environmental, Social and Governance (ESG) Roundtable for Development Partners in Accra, IFC Acting ESG Advisory Lead for Africa, Moez Miaoui, warned that many family businesses struggle or collapse during leadership transitions because future leaders are often inadequately prepared to assume control.
According to Mr Miaoui, one of the most significant challenges facing family enterprises is the failure to deliberately equip successors with the knowledge, experience and leadership skills needed to manage the business effectively.
“The fact that successors are not well prepared, not well educated about the business and do not have the necessary capabilities is a major challenge,” he said.
“In many cases, they may have the right educational background, but they do not know the business well enough because they have not been adequately prepared by the family, the business or the current leadership,” he added.
Mr Miaoui noted that succession-related difficulties are frequently compounded by the reluctance of founders and existing leaders to relinquish control of businesses they have built over many years.
“The other challenge is leaders who are not ready to let go because their identity and the business are one and the same. They find it very difficult to separate themselves from the business, making the transition process particularly challenging,” he explained.
He stressed that successful succession requires a structured and deliberate process that prepares future leaders while establishing governance systems capable of supporting a smooth transfer of authority and responsibility.
Family Businesses Key to Job Creation
Also addressing the roundtable, IFC Senior Country Officer, Yewande Giwa, highlighted the critical role family-owned enterprises play in driving economic growth and employment across Africa.
She noted that family businesses account for a substantial portion of private-sector activity and are uniquely positioned to contribute to inclusive development because they often take a long-term approach to business growth and community impact.
“About 90 per cent of jobs in Africa come from the private sector, and family businesses are a significant part of that ecosystem,” she said.
Ms Giwa explained that family-owned firms typically focus on more than profitability, often seeking to create opportunities for their communities and contribute to broader social and economic development.
“When you are a family business, you do not just think about your bottom line. You think about how to influence your community, how to make a difference and how to create more jobs for your immediate family, your extended family and beyond,” she stated.
According to her, this long-term outlook makes family businesses important partners in efforts to promote sustainable economic growth and employment creation.
“For us at IFC, family governance is very important because we want to see longevity and successful succession. We want to see businesses endure and continue creating value across generations,” she added.
Focus on Sustainable Business Growth
The ESG Roundtable for Development Partners brought together key stakeholders within Ghana’s environmental, social and governance ecosystem, including the World Bank Group, GIZ, KfW Development Bank, the United Nations Development Programme (UNDP) and other development partners.
The forum provided a platform for participants to discuss strategies for strengthening corporate governance, promoting sustainable business practices and enhancing the resilience and competitiveness of enterprises across Ghana and the wider African region.
Participants underscored the importance of strong governance frameworks and effective succession planning in ensuring that family-owned businesses remain viable, productive and capable of creating value for future generations.
