Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


African business reflects a crisis mentality

12 August 2014, 15:57 Fin24

Nairobi - Business confidence in Africa seems to reflect a crisis mentality, according to the Global Economic Conditions Survey by the  Association of Chartered Certified Accountants (Acca) and the Institute of Management Accountants (IMA).

The second quarter of 2014 was a particularly difficult time for many African economies, with a large regular economic survey of finance professionals around the world recording the worst business confidence levels in five years.

The survey shows that business confidence has steadily become decoupled from business opportunities since the second quarter of 2013 and is increasingly tied to government spending.

Over the last two quarters business confidence has become unresponsive to the supply of growth capital, the survey shows.

Business confidence has also become more sensitive to fears of unsustainable government finances as well as the strength of cash flow and demand.

"These are all signs of businesses worried about survival, and of a looming crisis,” said Schizas.

The survey shows that 45% of respondents in Africa reported a loss of confidence, up from 36% in early 2014.

Only 28% (down from 33%) reported confidence gains. Confidence was down throughout the real economy, among large financials and in the public sector.

“This level of pessimism wasn’t down to a poor macro-economic outlook among respondents in Africa. This became only marginally more negative since early 2014, with 42% of respondents (up from 41%) believing that conditions were deteriorating or stagnating," said Karen Smal of Acca South Africa.

"The majority remains optimistic with 55% (down from 57%) believing that conditions are improving or are about to do so."

Access to growth capital became more difficult, cash flow and demand conditions deteriorated, and input prices and exchange rate volatility remained elevated.

However, business opportunities rose marginally and opportunities for inorganic growth through business acquisitions or asset purchases remained stable.

As a result, business capacity building rose in the second quarter of 2014, according to Schizas.

Global scenario

The survey shows that there is growing business dynamism around the world, with North America and South Asia leading the charge in terms of capital spending, new orders and headcount.

Conversely, Africa and the Middle East fared worst, with all three areas either falling or stable.

Overall, most of the world’s confidence boost appears to be coming from North America, as well as a temporary rebound in Central and Eastern Europe, but improvements in these regions were balanced out by receding optimism throughout Asia, Western Europe, Africa and the Middle East.

- Fin24



Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
George Vodongo
Al Shabaab attack Mandera hotel, ...

A total of 33 non-locals were in the hotel when the assault was launched.  Read more...

Submitted by
Shakila Alivitsa
4 ways to handle your cheating ma...

He is cheating. How do you handle him?

Submitted by
Shakila Alivitsa
Why do men choose second wives?

Why do men choose to have second wives?

Submitted by
Eugene Odanga
Wizkid set for twin Kenyan shows

Wizkid is back in Kenya. For two shows.

Submitted by
Eugene Odanga
Udada women's festival begins in ...

The Udada women's festival has arrived in Nairobi.

Submitted by
Uhuru pardons 2747 death row conv...

President Uhuru Kenyatta has pardoned a number of death row convicts, sending them to life sentences instead. Read more...