South African business owners were a lot more optimistic about the economic conditions for the year ahead.
The Grant Thornton International optimism-pessimism index puts South Africans’ optimism balance at +53%, compared with a global optimism balance of +12%, and +35% for South Africa’s Brics partners Brazil, Russia, India and China.
South African business owners were “a lot more optimistic about the economic conditions for the year ahead”, said Deepak Nagar of Grant Thornton South Africa.
The index is part of second-quarter data in Grant Thornton’s “2012 International Business Report”, an international cross-industry annual survey of 12000 listed and privately held businesses.
But although South Africa’s optimism levels are comparatively high, they decreased from +58% in the second quarter of 2011 and +60% for the same period in 2010. South African complaints had more to do with sociopolitical and governmental concerns than global conditions. Almost 60% of those surveyed claimed to be negatively affected by poor government service. The complaints that increased most substantially, from 10% at the end of 2011 to 25% now, related to “billing issues” such as rates and taxes. Political uncertainty, at 29%, decreased slightly from 32% in 2011.
These reservations have financial implications: most of the politically uncertain respondents (26%) have put off investment decisions and 24% are considering investing offshore rather than in South Africa.
A startling 46% of respondents said that they, their immediate family or their staff had been directly affected by a threat to personal security in the past year. The high crime rate was cited as the biggest factor prompting considerations to emigrate and the latest rate of 72% was 10% percent higher than last year’s rolling average.
“Only by addressing poor service delivery … can business help to achieve the country’s goals to eliminate poverty and reduce inequality,” Nagar said. This would help to fight the “domino effect” that “results in an increase in crime”.