Johannesburg - Only 22% of CEOs in South Africa are “very confident” of their own company’s growth in the next 12 months, according to PwC’s 21st CEO survey.
The annual survey is based on interviews with 1 293 CEOs from 85 countries and 41 CEOs in South Africa were interviewed. The findings were shared at a press briefing in Johannesburg on Wednesday, as well as at a session in Davos at the World Economic Forum.
As KPMG and the McKinsey scandal dominated headlines, South African CEOs were losing sleep over the effect that scandals are having on their business.
Dion Shango, CEO of PwC in South Africa, told reporters at the briefing that 22% of CEOs in the country said they were extremely worried about the effect ethics-related scandals could have on their business, much lower than that of global bosses.
South African CEOs are less likely to employ more people, with 41% of the CEOs predicting that they will have to downsize their companies to keep them afloat.
PwC lead economist in South Africa Lulu Krugel said South Africa had missed some of the global optimism and upturn of the economy, and that this reflected in the CEOs' views, but that African markets presented new opportunities.
But the survey also showed that CEOs were cautiously optimistic about their own company's prospects for growth in 2018.
South African CEOs were also slightly more confident about their own company’s prospects for revenue growth over the next three years, with 37% compared to 45% globally ticking the box.
Globally CEOs were becoming increasingly worried about climate change and cyber terrorism, said Shango.
Interviews with the South African CEOs were done before Deputy President Cyril Ramaphosa was elected as the ANC’s new leader, probably influencing the sentiment that only 22% of CEOs in South Africa were positive about the short term prospects of their company, the lowest since 2009.
While the medium term’s figures are better with 91% of CEOs feeling positive, it was the lowest since 2009, when the global economy went into a recession.
The low figure comes on the back of the strife between the mining sector and the government, as well as the inaction around state capture.
South African CEOs’ concerns around a broad range of business, societal and economic threats have also risen.
CEOs are “extremely concerned” about social instability in South Africa with 98% ticking that box, opposed to the global 73%. Also 93% of South African CEOs cited over-regulation as in issue opposed to international CEOs' 83%.
In unemployment 93% of South African CEOs indicated that this was a concern, and only 50% of global CEOs. Also, 93% in South Africa said uncertain economic growth was a worry, and only 74% globally.
Populism presented a concern to 88% of South Africa CEOs, opposed to the global average of 77%.
The survey also showed that only 37% of South African CEOs – compared to 58% in 2016 – plan to increase their headcount in 2018, while 54% of global CEOs plan to increase their headcount.
In addition, only 18% of CEOs globally, compared to 22% of CEOs in South Africa, expect to reduce their headcount.