South African business outlook is at its lowest level on record, down from 71% in 2011 to 18% for the next 12 months into 2014, according to Grant Thornton’s International Business Report (IBR) quarterly tracker survey.
The amount of R30.8-billion squandered by the SA Government is 24% up on last year's R24.8-billion of wasted taxpayer’s funds and according to some economists the total figure could be closer to R100bn or more.
South Africa's economy is in decline following the strike in the motor industry, according to the BankservAfrica Economic Transaction Index (Beti).
"This is disappointing and could indicate that the 3% growth expected for next year may be a pipe dream if no improvement occurs in the last two months of the year", economist Mike Schüssler said.
The monthly and quarterly Beti showed an actual decline of 1.3% and 1.5% respectively.
Rising political uncertainty is making more business owners than ever defer investments decisions. A startling two-thirds (66%) said they were deferring investment decisions, compared with just 27% in the third quarter of 2012.
"The low sentiment among South African business owners could be ascribed to the flight of foreign funds following initial indications from the US Federal Reserve earlier this year that it would start tapering its economic stimulus programme," says Deepak Nagar, national chairman of Grant Thornton SA.
The flight of privately held business owners from South Africa also appears to have picked up pace as a result of political instability in the country, and although the figure of 14% of respondents considering emigration is fairly low, this has climbed 10 percentage points from the third quarter of 2012.
The proportion of business owners considering selling their businesses almost tripled, to 31% from 12% a year earlier.
The lack of a skilled workforce has been flagged once again as a significant constraint to operating a business in South Africa, with 39% of business owners stating this issue as a constraint to business growth and expansion.
"It is painfully ironic that we have chronic levels of unemployment, yet organisations are constrained from growing their business, and the economy, because we lack the right skills," says Mr Nagar.
Of even bigger concern was the impact of failing government services, with 59% saying it was an issue.
According to the survey, concern over basic utility services (water and electricity supply) has increased to 79% from 42% a year ago. Road infrastructure concerns (such as potholes and traffic light issues) and their negative impact on South African business executives has climbed to 64% from just 17% last year.
Crime remains an issue for business owners with 74% flagging it as the biggest financial burden they face.
The latest audit report of national and provincial government shows that wastage now stands at about R30.8-billion, and simply put, is the result of ineptitude and lack of accountability by poor civil service leadership. Financial wastage is made up of unauthorised expenditure (R2.3-billion), irregular expenditure (R26.4-billion) and fruitless and wasteful expenditure (more than R2.1-billion).
Leading economists indicate that if one adds in the full extent of corruption and maladministration, this number to be closer to R100bn or more.
The above was compiled from:
South African business outlook at its gloomiest
by Max Gebhardt, November 13 2013
Strike impact shows in SA economy index
Nov 14 2013 - Sapa
OUTA Outraged by Govt Waste
Posted on November 14, 2013
Government wastes R30.8bn
Nov 13 2013 Sabelo Ndlangisa, City Press