Jul 17, 2012
Poor service delivery crippling SA businessesBack
Natal|SECURITY|Africa|Business Growth|Education|Grant Thornton South Africa|Road|Roads|Security|Water|Africa|Brazil|China|India|Russia|South Africa|Security|Electricity|Security|Service|Services|Eastern Cape|Western Cape|Deepak Nagar|Security|Water|Operations|Eastern Cape
© Reuse this
Poor government service delivery, including by utilities such as electricity; political uncertainty and crime were hindering business growth in South Africa, advisory services provider Grant Thornton said on Tuesday.
In its 'International Business Report' (IBR), the firm found that 59% of all South African business owners surveyed were negatively affected by poor government service delivery. This figure is up from 53% recorded in the first quarter of 2012.
Grant Thornton South Africa national chairperson Deepak Nagar urged businesses to work together with government to resolve service delivery concerns. “Corporations have an obligation to meet shareholder aims and stimulate economic growth. If they are unable to do this, the domino effect is insufficient employment opportunities, which ultimately results in an increase in crime,” he said.
Nagar added that only by addressing poor performance on service delivery concerns such as utilities, billing issues and roads directly with government, could business help to achieve the country’s goals of eliminating poverty and creating and reducing inequality.
Thirty-two per cent of private business owners identified poor service delivery relating to utilities (electricity and water) as having the greatest negative impact on their businesses, while 25% stated that billing issues (rates and taxes) were affecting operations.
Another macroeconomic factor impacting on South Africa’s privately held businesses is the issue of political uncertainly, Grant Thornton stated.
Its second-quarter data revealed that sentiment was improving marginally in this regard, with 29% of respondents indicating that uncertainty about the political direction of the country was impacting business decisions (down from 32% in 2011 – rolling average).
“This is probably in the hope of securing new business contracts by presenting improved empowerment credentials to prospective clientele.”
Every quarter, business owners are asked whether they or their immediate family or staff have been directly affected by a threat to personal security, such as housebreaking, violent crime, road rage and hijacking.
The IBR tracker revealed that 46% of privately held businesses have been negatively affected by crime over the past 12 months. This figure has dramatically declined from a reported 86% in 2007 when Grant Thornton first began to research this concern.
However, the survey highlights an increase of 7%, with 42% of business owners having been affected by crime in the first quarter of 2012, compared with 49% of business owners in the second quarter.
“We cannot accept such a high incidence of crime on our people. We need to do everything we can to eliminate this threat once and for all,” Nagar warned.
“Optimism is down worldwide compared to the first quarter of 2012 and also in comparison to prior years. It is clear that the economic crisis is still far from over. But business owners in South Africa and in the Bric economies seem, on the whole, to be a lot more optimistic about the economic conditions for the year ahead, when compared to the global average,” Nagar concluded.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Economy News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...