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SA CEOs aiming for expansion

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(iStock)
(iStock)

CEOs plan to expand their businesses this year, even as national economic growth remains tepid, and take advantage of opportunities abroad, according to PwC’s annual global survey.

About 83% of the 36 South African company bosses surveyed said they planned to grow their businesses organically in the next 12 months, with another 58% saying they would boost headcount, PwC said in the survey released at last week’s World Economic Forum in Davos, Switzerland. Globally, 79% of 1 379 CEOs said they also planned to grow the same way.

“Companies are growing even in the sub-1% economic growth environment, but it’s certainly an environment of slow and stagnant growth,” PwC Southern Africa CEO Dion Shango told City Press after presenting the South African findings of the survey in Johannesburg.

“Companies are still finding smart ways of surviving in this tough environment.”

Higher commodity prices and a rebound in agriculture may propel South Africa’s economic growth to 1.1% this year and 1.6% next year, according to a survey conducted by Reuters. The SA Reserve Bank estimates growth was 0.4% last year, hobbled by the worst drought since records started and an uncertain policy environment.

Asked to name markets key to their growth, 36% picked China, 31% the UK, while 25% and 22% named the US and India, respectively, findings that Shango said were surprising given the current global environment.

New York, Tokyo and London were identified as global cities key to growth, while in Africa, Johannesburg, Lagos and Nairobi were ranked highest.

The survey included public and private companies across different sectors of the economy.

Key risks to these growth projections remained the volatile rand, rising unemployment and “geopolitical risks”, seen as alluding to incoming US President Donald Trump, who has already threatened Chinese, Mexican and Germany imports with tariffs, as well as Brexit, which has seen the UK seeking new trade partnerships.

CEOs were also worried about a lack of skills, cyber threats and unstable energy costs, the survey found.

“Looking forward, CEOs will require a different set of skills,” Shango said. “The events of the past year have shown us just how interconnected the interests of shareholders and other stakeholders really are.”

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