SA’s problems keep growing

Key South African industries that are predominately government-owned are a massive drag on business confidence in South Africa.

In a new episode of BusinessTech Business Talk, Busi Mavuso, the chief executive officer of Business Leadership South Africa (BLSA), said that the list of challenges facing businesses in the country has no end.

Significant issues include but are not limited to a weak rand, load shedding, dilapidated logistics infrastructure, social instability, crime, policy and more.

“The list goes on,” said Mavuso.

These challenges have led to many business owners losing confidence in the country’s operating environment.

RMB/BER’s latest Business Confidence Index (BCI) declined further to 27 in the second quarter of 2023 from 36 in the first quarter of 2023. According to the index, this is the lowest confidence level since 2020 – roughly only a quarter of all respondents were content with the current situation.

The survey was conducted between May 10-30, covering 1 050 senior executives in the building, manufacturing, retail, wholesale, and motor trade sectors.

Several other indices — covering other sectors, such as agriculture — are exhibiting the same sentiment, with business owners bleak about the state of the country and its prospects going forward.

Having that many CEOs not believing in the system is not good, said Mavuso.

To better this sorry state of affairs, Mavuso called for a direct and precise focus on major ‘network industries’ (key industries) that, if not fixed, make South Africa’s business case very weak.

The four key industries she refers to are: energy, transporting and logistics, water infrastructure and telecommunications

Out of these industries, three are not functioning, said Mavuso. The telecommunications sector is the only one that is operating and that is because “someone had the sense to privatise Telkom”, said the CEO.

“All the other three that are state-owned are dysfunctional, and these are the three we are trying to bring in significant private sector investment,” said Mavuso. “I really think that is where we should start.” — BUSINESSTECH.