EU confidence in SA slides

European business confidence
in South Africa has declined
in the past two years despite
companies seeing an increase
in turnover.
This was the outcome
of a survey conducted by
the European Union (EU)
Chamber of Commerce and
Industry Southern Africa late
last year.
According to Stefan
Sakoschek, regional director
of the chamber, this is the
third survey of its kind aimed
at measuring the general
business and investment
climate in the country.
More than 200 European
companies – of which nearly
40% derived a turnover of
more than R250 million –
took part in the survey at the
end of last year.
“The survey highlights
some grave concerns,” said
Sakoschek at the launch of
the findings in Cape Town
last week. “Firstly, it indicates
that the overall EU investor's
satisfaction in South Africa
has deteriorated since the
2014 Business Climate Survey
and even more so since 2012
when the White Book on
Trade and Investment in
South Africa was drawn
up. The main concerns are
around the currency volatility,
government corruption and
responsiveness, as well as
compliance with B-BBEE
legislation.”
He said another major
finding was
that there was
at present a
high degree of
uncertainty
among
the EU
companies
about the
future
business
climate in the
country. At
least 30% of
respondents
expected
the business
climate to
deteriorate over the next twelve
months while another 48%
predicted it would remain as
unstable as it currently is.
“Rising prices, including the
cost of water and electricity,
were cited as another key
challenge putting strain on
operations,” said Sakoschek.
“The continued volatility of
the rand is also concerning as
it exposes EU companies to
fluctuations in revenue and the
cost of raw materials as well as
higher import costs. The cost
of compliance with B-BBEE is
also very high.”
Issues around inconsistent
government policies, the lack
of transparency and overall
corruption
were also
concerns, he
said
According
to Sakoschek,
the findings
of the survey
guide the
chamber,
which
represents EU
companies
in South
Africa, in its
discussions
with
government
and other stakeholders.
“It has to be said that
despite the worsening
investment outlook, many
of the EU investors in South
Africa have increased their
turnover and have created jobs
in the past three years. South
Africa continues to maintain
an advantage in comparison
to other African countries,”
he said.
INSERT AND CAPTION
The main concerns
are around the
currency volatility,
government
corruption and
responsiveness.
– Stefan Sakoschek