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<\/a><\/figure><\/div>\n\n\nThe recent Deloitte Africa Restructuring Survey showed that respondents believed that the local economy could take up to three years to reach pre-pandemic levels.<\/p>\n\n\n\n
Nevertheless, the survey showed that \u2018pessimism\u2019 had fallen from 81% in 2023 to 75% in 2024.<\/p>\n\n\n\n
Jo Mitchell-Marais, Africa Turnaround & Restructuring Leader for Deloitte Africa, said that the new rating doesn\u2019t necessarily mean that respondents feel optimistic but that they have instead accepted the current economic situation and expressed resilience. <\/p>\n\n\n\n
The \u201cnew normal\u201d is characterised by elevated load shedding, soaring interest rates, ineffective ports,\u00a0and ongoing political uncertainty\u00a0due to the upcoming election.<\/p>\n\n\n\n
\u201cCompanies are trying to operate in spite of these challenges, but we are far from being \u2018optimistic\u2019 given the\u00a0Fitch Ratings\u00a0forecast of real GDP growth only increasing by 0,9% in 2024 and 1.3% in 2025,\u201d said Mitchell-Marais.<\/p>\n\n\n\n
The new normal is expected to create new challenges for the organisation, with further business distress expected. <\/p>\n\n\n\n
According to respondents, weak board governance was the primary internal factor triggering distress, followed by a lack of cash management and weak financial controls.<\/p>\n\n\n\n
\u201cThe development of skilled and qualified directors will go a long way in assisting to improve the board\u2019s ability to both identify early warning signs of distress and take appropriate, timely, and corrective action.\u201d<\/p>\n\n\n\n
\u201cIt is crucial that they have their finger\u00a0on the pulse of the business and broader socio-political and economic activity.\u201d<\/p>\n\n\n