Pessimism among South African chief executives escalates
The survey found that only 14percent of the chief executives in South Africa were “very confident” about their 12-month revenue prospects compared to 18percent in 2019. South African chief executives were pessimistic about the rate of global economic growth with 44 percent in 2020 believing that it would decline over the next 12 months compared to 35percent in 2019.
PwC Africa chief executive Dion Shango told journalists that no matter where chief executives were looking, the path was fraught with uncertainty.
“Pessimism among South African chief executives has deepened this year characterised by a lack of business confidence and a decline in business activity overall. The current state of the economy and socio-political uncertainty is dampening business expectations,” Shango said.
The World Bank cut the country’s economic growth prospects to 0.9 percent in 2020 due to electricity concerns, while the IMF said it expected South Africa’s gross domestic product for 2020 to grow by a lowly 0.8 percent. Shango said despite the current uncertainty, there were still opportunities to be pursued.
“Faced with uncertainty, business leaders need to act decisively and quickly. Instead of looking inward, they should broaden their field of vision and strive to create a broader range of options to pursue. Some of these opportunities include the upskilling, development and training of their people. Chief executives also need to look at how they can structure and further enhance their operational efficiencies,” said Shango.
The report, which comprised a survey of almost 1600 chief executives from 83 countries, was launched at the World Economic Forum annual meeting in Davos, Switzerland, this week. In addition to SA’s stagnant economic growth rate, policy uncertainty and social instability topped the list of issues that kept chief executives awake at night.
Shango said: “South African chief executives are saying that there have been little changes made by the government in giving investors comfort in the direction of policy certainty.”
The survey found that chief operational efficiencies, including rationalising operations, topped the list of steps that chief executives were prepared to take to boost their operations.
Organic growth and the launch of a new product were also some of the options, said the report.