African CEOs the most confident, survey finds
DESPITE the turmoil in Europe and the spectre of a prolonged global recovery, CEOs in SA and the rest of Africa were the most confident in the second quarter compared with their global peers, according to a new survey published yesterday.
Their confidence surpasses even that of CEOs in Asia, whose economies have until recently been growing rapidly, fuelled by demand in China where the economy is now showing signs of stalling.
Separately, the survey by the non-profit organisation, Young People’s Organisation (YPO), showed confidence among CEOs in the US had declined owing to concern about the economy for the six months ahead.
The YPO, which is represented in SA with about 470 members, is a global network of 20,000 young CEOs whose companies employ more than 15-million people and generate more than $6-trillion in revenue each year.
Its survey was carried out during the first two weeks of last month and gathered the views of nearly 1,700 CEOs, 85 of them African, most of whom were from SA, said Khutso Mampeule, a member of the YPO’s Johannesburg chapter and chairman of its Africa region.
The survey said the YPO global pulse index for Africa rose 1.3 points to 65.6 in the second quarter of the year, making it the world’s most optimistic region.
"Following a decline in economic optimism by 6.5 points in SA over the first three quarters of 2011, its confidence level has gradually moved higher and now stands at 64.8, its highest reading since January of 2011," the survey found. "Moreover, this marks the third quarter in a row that African confidence has landed higher than that of Asia, which previously had a lead over the rest of the world in terms of economic optimism," it said.
The survey’s findings in SA and the rest of Africa confirmed recent comments by business leaders that sub-Saharan Africa had become one of the most attractive regions in which to invest, owing to projected growth rates of as high as 8% in some countries.
SA, Africa’s largest economy, is expected to grow about 2,7% this year, according to Reserve Bank estimates, though Nomura economists say growth could be as low as 1,7%.
Nedbank, however, said yesterday that the economy was losing momentum and that the focus over the coming months would be on the success of global efforts to prevent another recession.
Mr Mampeule said he was not surprised at the confidence levels, because SA and the region had become a global destination for trade and investment as investors fled from depressed markets elsewhere.
He said such confidence should provide cautious optimism to local companies sitting on excess cash. "Remember the saying that where there is no risk, there is no gain. There are golden opportunities ahead even outside the natural areas, such as resources," he said.
Among other findings, the survey said confidence about investment in fixed assets had risen 1.6 points to 66.8 in the second quarter, the highest in the world and showing CEOs believed Africa offered some of the most attractive opportunities.