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Electricity supply constraints weigh on confidence of S Africa’s CEOs

Electricity supply constraints weigh on confidence of S Africa’s CEOs

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4th March 2015

  

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More than half CEOs surveyed as part of the latest Merchantec CEO Confidence Index, said load-shedding was negatively impacting businesses, as it lowered productivity and raised costs.

The index, released on Wednesday, showed that 76.2% of CEOs felt that load-shedding would have a greater impact on their business activities than the positive impact of the drop in the oil price.

Eighty-nine per cent of CEOs in the basic resources sector expected load-shedding to have a significant negative impact on their bottom lines. As a result, CEOs suggested that the provision of energy should be opened to the private sector and believed that this would provide job opportunities, competitive prices and sustainable energy provision in the medium to long term.

Other concerns raised by CEOs in the latest survey included lower foreign direct investment, owing to the negative perceptions of international investors regarding the business environment in South Africa and corruption in the public sector.

The index had recorded a 2.7% quarter-on-quarter decrease, from 52.1 points in the fourth quarter of 2014, to 50.7 points in the quarter under review.

The Merchantec CEO Confidence Index collated responses from more than 1 000 top CEOs, primarily of listed companies.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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