Jul 17, 2012
Poor service delivery crippling SA businessesBack
Natal|Africa|Business Growth|Education|Grant Thornton South Africa|India|Road|Roads|SECURITY|Water|Africa|Brazil|China|Russia|South Africa|Electricity|Service|Services|Eastern Cape|Western Cape|Deepak Nagar|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)
Creamer Media Senior Researcher and Deputy Editor Online
Other Macro and Micro News
Updated 5 hours ago The African Development Bank's (AfDB) governors began voting on Thursday to elect a new president to guide the pan-African lender through the continent's increasingly complex financial environment. Eight candidates, including Nigeria's agriculture minister, Akinwumi...
Updated 6 hours ago The Construction Industry Development Board (CIDB) would, within the next six weeks, form a task team to develop frameworks for encouraging local construction companies to enter Africa’s developing markets and to seek further growth through the possible establishment...
Updated 7 hours ago Police Minister Nathi Nhleko says that the firepool‚ amphitheatre‚ kraal‚ chicken run and visitor's centre at the president's Nkandla home are all security features and Jacob Zuma is not liable for any costs associated with them. In summarising his 51-page...
Updated 4 hours ago Irish Foreign Affairs and Trade Minister Charles Flanagan told media on Thursday that Ireland was well positioned to play a greater role in Africa, particularly in the aviation, pharmaceuticals and agricultural industries. Flanagan was this week leading a high-level...
Updated 4 hours ago The Lesotho Highlands Development Authority (LHDA) has appointed three consultants for work packages as part of Phase 2 of the Lesotho Highlands Water Project (LHWP). The contracts, worth a collective M40-million, were awarded to the SMEC-FMA joint venture (JV);...
Updated 4 hours ago JSE-listed Huge Telecom continued to grow its distribution capabilities during the year ended February 28, with the number of business partners increasing by 136, or 47%. Huge Telecom’s connectivity services, which were distributed mainly to small and medium...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
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.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...