The 11 biggest threats facing South Africa in 2019 according to CEOs
“A lot can change in a year” is the message from PwC’s 22nd Annual Global CEO Survey.
While many CEOs expect global economic growth to ‘improve’, there is a sharp rise in those saying growth will ‘decline’ according to the data.
Last year saw a record jump in optimism regarding global growth prospects in 2018, and this exuberance translated across regions. This year, by contrast, saw a record jump in pessimism, with nearly 30% of CEOs projecting a decline in global economic growth, up from a mere 5% last year.
CEOs also reported a noteworthy dip in confidence in their own organisations’ revenue prospects over the short (12-month) and medium (three-year) term. If CEOs’ confidence continues to be a leading indicator, global economic growth will slow down in 2019.
Confidence among South African CEOs has improved, however. “Perhaps the new dawn has instilled some optimism in them – perhaps the logic goes that when things can’t get much worse, there’s a good chance they may improve,” said Dion Shango CEO for PwC Southern Africa.
Among local CEOs, 93% expressed confidence about their companies’ medium-term prospects. But only 33% said they are ‘very confident’, the lowest level since we began the survey in South Africa.
“So while we might surmise that South African CEOs are optimistic, they are increasingly cautious. The state of the economy, unemployment and political uncertainty, rising populism, general elections – these and other factors are casting a shadow over business expectations.”
Chief executives were asked how concerned are you, if at all, about each of these potential economic, policy, social, environmental, and business threats to your organisation’s growth prospects?
What stands out most, PwC pointed out, is the vast gap in levels of ‘extreme concern’ between South African and Global CEOs in key areas of socio-political and economic threats.
This can be explained against the background of rising populism, the unresolved expropriation without compensation issue and heightened rhetoric in the lead up to the general elections later in the year, Shango said.
And while the picture may seem bleak as we head into another year of low growth projected by various monetary authorities, in many instances CEOs’ outlooks are actually better than they were a year ago, with few threats increasing and many declining in significance – as shown in the graph below.
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