CEO confidence is on the wane as Ramaphoria heads towards Ramaphalia
CEO confidence tumbled back to pre-Ramaphoria levels in the second quarter, a survey sponsored by Merchantec Capital found.
Merchantec’s CEO confidence index, which jumped from 45.9 points in the fourth quarter of 2017 to 60 points in the first quarter of 2018 when Cyril Ramaphosa replaced Jacob Zuma as SA’s president, fell back to 47.4 points.
"Most CEOs hoped that the election of President Ramaphosa would bring drastic Cabinet reshuffles, as well as radical economic policy changes that would potentially create an upturn in business confidence, but the anticipated effect has not translated in this quarter’s results of the survey," Merchantec said in a media release on Friday.
Asked to give Ramaphosa a score from one worst to 10 best, 47% of the CEOs polled gave the new president a borderline pass mark of five. No CEOs rated Ramaphosa 10, 5% gave him nine, and 37% eight.
"A few CEOs said that it was unreasonable to expect a huge shift in the economy in such a short time, and believe it will take far more than 100 days to turn the economy around, but the prevailing attitude is one of scepticism," Merchantec said.
"CEOs cited that there are five major contributors to their change in disposition: the "Zuma Hangover"; uncertainties surrounding expropriation of land without compensation; the VAT increase; the fuel price hikes; and the rand/dollar exchange rate volatility."
Of the six industry sectors Merchantec splits its survey into, CEOs of consumer services companies were the gloomiest. Basic materials was the only sector where CEOs were more optimistic — probably due to the sigh of relief when Mosebenzi Zwane was ousted as mineral resource minister.