Business confidence is at an all-time low as a result of political uncertainty, poor economic performance, policy confusion and a general lack of leadership; and many South African businesses are in distress.<\/p>\n
This is the sentiment of Alastair Macduff, CEO of the\u00a0the Turnaround Management Association (TMA), who believes that businesses are feeling the impact of\u00a0\u00a0low investor confidence, weakening exchange rates and high fiscal uncertainty.<\/p>\n
\u201cThe good news however is that South Africa has a relatively open economy \u2013 and a resilient business resolve,\u201d said Macduff.<\/p>\n
\u201cTo survive the current landscape, improved productivity and efficiency as well as diversified skills and flexibility will be paramount. Businesses will also need to find ways to decrease infrastructure and reduce financial risk in their environments,” he said.<\/p>\n
Macduff warned that\u00a0while growth will come from areas such as inbound investments, exports, and international investment, the restructuring and rescue industry will have a critical role to play in helping business transition to new and more effective business models in a turbulent setting.<\/p>\n
Businesses in trouble<\/b><\/p>\n
Citing a recent Deloitte survey, Macduff identified\u00a0retail, agriculture, construction and resources as sectors which are the most at risk.<\/p>\n
According to the CIPC, (Companies and intellectual Property Comission) 2,499 businesses have entered into business rescue proceedings over the past 5 years \u2013 with the majority coming from the wholesale and retail industry, ICT,\u00a0 and construction<\/strong> sectors, respectively, said Macduff.<\/p>\n Of the 1,358 business rescue proceedings that have been concluded, 29% reached substantial implementation to the satisfaction of creditors.<\/p>\n \u201cSouth African businesses need to understand the options that are available to them and that business rescue could be a viable possibility,\u201d said Macduff.<\/p>\n \u201cWe need a new perspective of doing business in Africa. Looking at the economic trajectory both locally and internationally for the next 6 \u2013 12 months more businesses are likely to become distressed. Now\u2019s the time to act.”<\/p>\n
\n