News in South Africa 15th November:
1. Hopes of business growth:
Despite an anticipated recession South African CEOs are already mitigating against expected risks with hopes of shaping business growth over the next few years.
This is according to KPMG’s 2022 CEO Outlook Survey, which examined 1 325 CEOs around the world on their three-year perspective on business, inflationary pressures, and geopolitical tensions. The research was released locally in Sandton on Monday.
“A promising 72% of local executives have already taken steps to boost productivity in preparation for [the] anticipated recession, indicating CEOs are cautiously focused on future opportunities during such uncertainty,” says KPMG South Africa CEO Ignatius Sehoole.
However, in the short term, the survey shows that 82% of local CEOs, compared to 75% globally, have already implemented or plan to implement a hiring freeze in the next six months to cushion operations against the anticipated recession.
On the other hand, 88% of local CEOs, compared to 80% globally, have indicated that they are considering downsizing their employee base in the next six months.
The survey revealed that CEOs are prioritising technology, talent and ESG (environmental, social and governance) initiatives to grow their businesses.
It says 84% of local executives are focusing on digital investments, with 58% allocating more capital investment towards buying new technology.
Risks
The report notes that ahead of supply chain and regulatory risks, disruptive technology has emerged as the top risk and greatest threat to organisational growth over the next three years with many CEOs citing it as a priority.
It indicates that 82% of local CEOs said they are prepared for cyber attacks, compared to 56% globally.
Another priority for CEOs is the attraction and retention of talent in their businesses.
“CEOs in South Africa are changing how they support and attract talent, and their efforts are buoyed by a focus on their people and experimenting with ways of working,” reads the report.
It notes that 70% of local executives expect to increase the headcount over the long term to address growth objectives, compared to 76% of global executives.
Sehoole says a widely shared view from local executives is their preference for their workforces to return to the office on a full-time basis in three years.
2. Fuel price forecasts:
According to the latest information from the Central Energy Fund, petrol prices may be hiked in the first week of December, ahead of South Africa’s peak travel season. However, diesel could ease from record high levels.
The fuel prices are usually adjusted on the first Wednesday of a month and determined by the price of oil and the rand-dollar exchange rate.
The data shows that 95 unleaded petrol could be increased by around R1.10 a litre in December, with 93 petrol due for a 97c hike.
But diesel may be cut from record-high levels, and currently looks set for a decrease of between 27c and 35c.
The mid-month snapshot is as follows:
- Petrol 93: increase of 98 cents per litre;
- Petrol 95: increase of 109 cents per litre;
- Diesel 0.05%: decrease of 35 cents per litre;
- Diesel 0.005%: decrease of 26 cents per litre;
- Illuminating Paraffin: increase of 31 cents per litre.
Oil prices have been volatile in recent weeks. Demand has been bolstered by easing Covid-19 lockdown restrictions in China and a cut in production among oil producers. However, the oil price is trading at its lowest level in three weeks amid concerns about the US economic outlook.
A recent rally in the rand – which surged from R17.85/$ a week ago to R17.26 on Tuesday – will help fuel prices.
The Department of Energy has stressed that the daily snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which are determined by the department at the end of the month, taking all variables into account.
Following another hike this month, the Gauteng diesel price is now at R25.49 a litre – a new record high. A year ago, Gauteng’s diesel price was around R17.20 per litre.
3. Used vehicle prices rising:
Prices for used vehicles in South Africa are ballooning, with price inflation outpacing headline CPI by some margin.
While this has caused some industry experts to warn of a possible bubble in the market, used-vehicle marketplace WeBuyCars says that the local market is resilient and not showing signs of collapse.
WeBuyCars owner Transaction Capital has published its annual results for the year ended September 2022, showing massive growth for the used-vehicle group.
WeBuyCars reported core earnings of R762 million for the year, up 41% from 2021, with 130,177 vehicles purchased over the period and 125,812 sold – an increase of 42% and 43%, respectively.
The group also opened five new marketplaces during the year, including the massive 1,400-bay showroom at The Dome in Joburg, taking its total bays to 8,580 – up from 5,807 in 2021 (+48%).
WeBuyCars has also made what it calls an “irreversible” push into e-commerce, driven by demand through the Covid-19 pandemic. Car sales through its e-commerce platform accounted for 27% of all sales (down from 30% in 2021 during lockdown), but numbers were up significantly (28%) to 34,300 vehicles sold.
According to WeBuyCars, the used-car market in South Africa is still the leader in vehicle sales by some margin. With approximately 11.2 million vehicles in circulation in the country, the number of used vehicles is still more than double the number of new vehicles.
New vehicle sales were hampered by supply shortages over the last few years but have since returned to pre-Covid levels, the group said. This will ultimately grow the number of vehicles in the country and benefit vehicle trading, it said.
“The outlook for the used vehicle market in South Africa remains positive. Vehicle ownership remains an aspiration deeply rooted in South African culture, and mobility trends have shown that more people are moving from using public transport and being passengers in personal vehicles to owning their first car,” the group said.
4. 1400 Ghost employees at Prasa:
At least 1400 employees working at the Passenger Rail Agency of South Africa (Prasa) can’t be verified, according to Transport Minister Fikile Mbalula.
Mbalula says this results from lousy management at Prasa, and efforts to resolve the issue will include working with other government departments to verify credentials and digitise staff information.
Several steps are being taken to deal with ghost employees.
These are workers who earn a salary but never physically clock in. Or sometimes prove to be fake.
5. 40% of South Africans committing fraud:
About 40% of South Africans find it acceptable to exaggerate income on applications for credit and inflate insurance claims, according to a new survey by global data analytics company FICO.
Many South Africans see no problem in committing first-party fraud by lying about their income when applying for loans, cell phone contracts, vehicle finance or a mortgage. The same can be said about exaggerating the value of property in an insurance claim and even, although to a lesser extent, adding items to such a claim that weren’t lost, stolen, or damaged.
“Many South Africans are experiencing a rise in the cost of living and might consider that they can ease their circumstances by falsifying information in applications for credit,” said Michelle Beetar, who heads FICO’s operations in Africa. The credit-focused data analytics company surveyed 1,000 South African adults in August, with the results of the study published on Monday.
“However, this misrepresentation is fraud.”
More than 45% of those surveyed by FICO found it acceptable – and in some cases normal – to exaggerate their income when applying for a cellphone, making it the most significant instance of willing first-party fraud uncovered by the study.
All information sourced from articles posted by: Moneyweb, Fin24, BusinessTech, ENCA, and Business Insider.
