Global pessimism has dampened the outlook in South Africa

03 February 2020 Consultancy.co.za

An increasingly uncertain global climate is breeding pessimism in the business environment across the world, and South Africa is no different. PwC reports that CEOs in South Africa are displaying a higher rate of pessimism than ever before when it comes to the economic outlook over the next year.

The number of CEOs in South Africa that believe that global economic growth is set for a decline in the next 12 months is at 44%, which is significantly higher than the 35% who thought the same last year. The findings echo the sentiment across all regions in the world, from the rest of Africa to Europe and the Americas.

Pessimism in South Africa is not new, and is likely the product of the economic conditions prevalent in the country. With high rates of unemployment and decreasing rates of GDP growth, the country has dipped below investment grade and businesses are struggling to find the silver lining for the economy.

Levels of pessimism: South Africa vs the world

For their own business, on the other hand, South African executives appear to be keeping their spirits up. PwC reports that as many as 78% of South African CEOs are confident about the growth of their own business in the next 12 months, compared to just 56% across the globe.

The key challenges that businesses in South Africa anticipate facing in the near future include a growing skill gap, rising unemployment levels, as well as cyber threats to their business. Similar concerns were voiced by South Africans vis-à-vis the challenges facing the economy as a whole.

“No matter where CEOs look or from where they are looking, the path is fraught with uncertainty. Pessimism among South African CEOs 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,” said Dion Shango, CEO of PwC Africa.

“Despite the current uncertainty, there are still opportunities for South African CEOs to pursue. 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. CEOs also need to look at how they can structure and further enhance their operational efficiencies,” he added.