Red tape, skills shortage top concerns for South African business | Business | BDlive

Business DayEXCESSIVE regulation and red tape, and a lack of skilled workers are major concerns among South African privately held businesses, the first-quarter Grant Thornton International Business Report (IBR) released on Monday showed.

These factors, the businesses say, are directly restricting their expansion.

The report provides insights into the views and expectations of about 3,000 different privately held businesses across 44 economies each quarter. About 150 of these businesses are based in South Africa.

The businesses are surveyed on their views in five areas: business constraints, government service delivery, crime, sociopolitical factors, and optimism.

The skills deficit in South Africa continues to be a concern, with 40% of those surveyed citing a lack of skilled workers, and 39% indicating excessive regulation and red tape as major concerns.

The survey showed that 57% of business executives were being negatively affected by poor government service delivery, with 41% stating the issue was utilities (water and electricity supply), 23% billing issues and 21% roads (potholes, traffic lights).

An additional 14% of respondents reported feeling the effects of a combination of labour strikes, poor payment from government and tender fraud.

“Our latest research is in line with many media reports currently being published in the press,” Grant Thornton South Africa national chairman Deepak Nagar said.

“The weight of the global economic downturn is becoming unbearable and additional local pressures are not helping at all.

Asked whether uncertainty about the future political direction of South Africa was affecting current business decisions, 36% of executives said yes.

Despite the gloomy figures, business owners in South Africa, however, continue to be positive about the next 12 months, with 48% of executives surveyed stating that they are optimistic about business prospects for 2013.

This figure is also marginally higher than the executives in the Bric (Brazil, Russia, India and China) grouping and twice as optimistic as the global statistic (South Africa — 48%; Brics — 47%; global 20%).

However, South African business confidence is significantly down from 2010, when the figure was 60%.