Jul 17, 2012
Poor service delivery crippling SA businessesBack
Natal|Business Growth|Education|Grant Thornton South Africa|Africa|Brazil|China|India|Russia|South Africa|Electricity|Eastern Cape|Western Cape|Deepak Nagar|Eastern Cape
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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
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