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CityPress - - Business -

revor Hoole, the CEO of au­dit­ing gi­ant KPMG in South Africa, says he was taken aback and “ab­so­lutely miffed” when he dis­cov­ered that the en­tire African con­ti­nent had been left out of a global out­look sur­vey of chief ex­ec­u­tives by KPMG In­ter­na­tional.

His dis­may was mol­li­fied some­what when he saw that other emerg­ing econ­omy are­nas – eastern Europe and South Amer­ica – were also left out.

“At first, I was in­dig­nant be­cause I thought it was be­cause we were not re­garded as be­ing im­por­tant enough, and I thought that couldn’t be right,” says Hoole.

The study looks at the con­fi­dence lev­els of al­most 1 278 chief ex­ec­u­tives in the US, western Europe, China, In­dia and Aus­tralia, with 347 of them com­ing from com­pa­nies with rev­enues of more than $500 mil­lion (R6.3 bil­lion).

“Then the re­al­ity sets in. I thought that it was another sign of what is hap­pen­ing. The emerg­ing mar­kets, and South Africa in par­tic­u­lar, are so dis­counted in ev­ery­one’s minds that they are fo­cused on their own is­sues. The neg­a­tive sen­ti­ment be­comes the re­al­ity.”

Hoole says the most strik­ing find­ing of the sur­vey is that chief ex­ec­u­tives of global busi­nesses are con­fi­dent about their com­pa­nies’ growth and ex­pect to hire more staff in the next three years.

“The level of con­fi­dence ex­pressed by global CEOs is less likely to be echoed in South Africa,” says Hoole.

He points to the re­cent SA Cham­ber of Com­merce and In­dus­try busi­ness con­fi­dence in­dex (BCI), which says South African CEOs are less op­ti­mistic about the prospects of do­ing busi­ness in South Africa than they were a year ago. In fact, the av­er­age BCI of 88.8 over the first six months of 2015 was the low­est it has been in 16 years. In the first half of 1999, the BCI mea­sured 86.2. Ac­cord­ing to the KPMG study, 69% of CEOs in Europe, 66% in Asia Pa­cific and 52% in the US are more con­fi­dent than they were last year about growth and the global econ­omy in the next three years.

In as­sess­ing their own com­pany’s growth prospects, 70% of Euro­pean CEOs, 68% of Asia Pa­cific CEOs and 19% of US CEOs in­di­cated they were more con­fi­dent than they were a year ago.

Most im­por­tantly, CEOs glob­ally are set to hire, with 78% of re­spon­dents in­di­cat­ing they are ex­pect­ing to be in hir­ing mode un­til mid-2018.

“Whereas global en­ti­ties say that head­counts will in­crease, we be­lieve this will not nec­es­sar­ily be the case in South Africa,” says Hoole.

“An im­prove­ment in the econ­omy is what is needed to in­crease head­count in South African com­pa­nies.”

Based on fig­ures from Stats SA, the un­em­ploy­ment rate in­creased to 26.40% in the first quar­ter of 2015 from 24.30% in the fourth quar­ter of 2014.

“We are not as badly off as coun­tries that are ex­pe­ri­enc­ing de­faults on a large scale, but peo­ple abroad can see that there is a lack of lead­er­ship here,” says Hoole.

“We are drift­ing to­wards be­com­ing a more so­cial­ist wel­fare state, and that is not con­ducive to at­tract­ing the in­vest­ment dol­lars that we need.

“If this coun­try is go­ing to re­verse this trend, gov­ern­ment must be­come more sup­port­ive of en­trepreneurs by im­prov­ing ac­cess to in­cen­tives and de­creas­ing the amount of red tape re­quired to do busi­ness in South Africa,” says Hoole.

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