With the ongoing power crisis, South African CEOs are losing confidence in their ability to secure debt or equity capital, noting that investors are becoming increasingly cautious when considering South Africa as an investment opportunity.
Advisory firm Merchantec Capital’s CEO Confidence Index, which collated responses from over 1,000 top CEOs, primarily from the listed environment, recorded that many CEOs believed the general public were not getting the “full story” behind the national power crisis and the true state of the power stations and their level of deterioration.
“The ongoing power crisis is a major contributor to the fairly grim outlook of CEOs in South Africa,” the survey stated, adding that 82% of CEOs believed load-shedding would continue for at least another two years.
The lack of information, transparency and government planning, together with the irregularity of power outages made it increasingly difficult for CEOs to plan for the long term, the survey noted.
The index saw a significant decrease from a positive score of 51.4 points in the first quarter to 45.4 points – below the neutral 50-point level – in the second quarter of the year. Sixty-three per cent of CEOs had already invested in measures to mitigate the effects of load-shedding.
The power crisis was imposing significant costs on companies in South Africa in the form of productivity losses, the cost of idle time, as well as the cost of restart time.
