Weekly Mail Reporter
ALMOST three quarters of the executives of the Top 100 companies listed on the Johannesburg Stock Exchange have no faith in the reconstruction and development programme, the ANC’s grand plan to put right the wrongs left by apartheid.
This is the finding of the annual business environment survey conducted by Unisa’s Bureau of Market Research
Seventy-four percent of the executives believe that the RDP will not satisfy the expectations of the previously disenfranchised members of the South African community. Consequently, according to the study, they predict that labour unions will play a larger rather than a smaller role and that unrest and strike action will intensify.
The executives believe that the affirmative action programme is having a negative effect on productivity in South Africa. They also foresee more pressure on companies to unbundle. However, they think that the political situation will improve compared with 1994.
Major strategic issues facing business in the new South Africa were identified as: employment growth and creating employment; affirmative action and expectations of the previously disenfranchised; productivity improvements; greater business management efficiency; becoming globally competitive; adapting to meet rapidly changing demands and expectations in South Africa; and optimising profitability.
The BMR survey, which was done in October last year, also asked executives about their expectations for 1995. Most of the executives believe the financial rand should go now. Ninety four percent of the executives surveyed were adamant about the need to scrap the dual currency system. They are convinced, says the BMR, South Africa drops further behind its rivals in the emerging markets with every day exchange control and a two-tier currency stay in place.
Seventy-five percent foresee greater business confidence this year. Generally speaking the executives are not overly optimistic about economic growth in 1995. They foresee growth around 2,6 percent.
The average rate of inflation is expected to rise to 10,7 percent. A further rise in the prime overdraft rate is expected by the end of December.
A deterioration in the dollar/commercial rand exchange rate to an average of $1 = R3,87 in 1995 (it is now around R3,55) is also predicted.
The executives forecast a higher average gold price and see further upward movement in the three major stock exchange indices — All Gold, Industrial and Overall — by the end of December this year.