New survey shows Ramaphoria is losing steam

2018-06-28 17:54

A recent survey of chief financial officers has indicated that the euphoria surrounded the ascendance of Cyril Ramaphosa to the presidency is being retarded by political volatility and uncertainty.

The survey, which was jointly conducted by Duke University, the South African Institute of Chartered Accountants, Africa Investment Advisers as well as CFO Magazine South Africa, indicates that of the 27 South African chief financial officers interviewed in the first quarter, 89% were more optimistic about the economy than they had been at the end of last year.

The survey found that of the chief financial officers interviewed in the first quarter:

• 75.6% believe corruption reduces the quality of goods and services;

• 66.6% believe corruption increases prices;

• 63% believe corruption reduces tax revenues collected by the government;

• 63% believe corruption hinders the expansion process; and

• 55.6% believe corruption hinders competition.

Of the 15 chief financial officers interviewed in the second quarter, a slightly lesser figure of 67% were more optimistic, showing a decline in confidence.

“The research measures the opinions of chief financial officers, who are informed by their experience and education. We as accountants and financial strategists are by nature cautious beings, so this continued and overwhelming vote of greater levels of optimism by chief financial officers over the past two quarters is all the more remarkable,” said Zimkita Mabindla, senior executive of corporate reporting at the South African Institute of Chartered Accountants.

According to the report, the significantly increased optimism of the first quarter was counterbalanced by the finding that economic uncertainty and the volatility of the political situation were the chief financial officers most pressing concerns while third on their list of woes was currency risk.

Government policy, corruption and white-collar crime were cited as concerns.

The less notable sources of concern uncovered in both quarters were access to capital and regulatory requirements while 30% of the chief financial officers noted the former as a pressing concern and only 18% were perturbed by the latter.

In both quarters interviewees had anxieties related to employee retention, commodity prices, employee productivity as well as the imbalance between transformation and service delivery.

The report also indicated that by the second quarter none of the chief financial officers were most concerned by inflation but the percentage of those most concerned by the cost of borrowing had grown significantly to 13.3%.

The effects of unethical behaviour on the national psyche are impossible to measure. Yet, the economic effects of such behaviour are measurable; so too is the perceived harm caused by corruption.

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cyril rama­phosa
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March 17 2019