How ‘squeeze scenario’ affects Africa’s listed companies
High borrowing costs lead to increasing debt servicing costs that will decrease consumer spending and capital expansion
Deloitte has released a report that factors in the impact of inflation and interest rate increases — what it calls “the squeeze scenario” — and how it affects the profitability and debt capacity of listed companies in 10 countries across Africa, including SA.
This is captured in the Deloitte Stability Index 2023 (https://www2.deloitte.com/za/en/pages/mergers-and-acquisitions/articles/deloitte-stability-index-2023.html), which includes how market pressures such as inflation, high borrowing costs, high debt servicing costs, margin erosion and slower moving inventory affect company bottom lines and their ability to service debt...
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