Business confidence rises but still taking a knock: Peggy Drodskie – CEO, SACCI

SACCI does not look to improved business mood in 2015.

SIKI MGABADELI: Business confidence in South Africa registered its slowest start to the year in nearly two decades as the economy grapples with global and local headwinds, including electricity shortages. Business confidence edged up just to 89.3 in January from 88.3 in December. That’s according to the South African Chamber of Commerce & Industry. But the level was the lowest January print since 1997. SACCI says it does not project an improved state of affairs for the business mood in 2015.
   SACCI CEO Peggy Drodskie joins us now, Peggy, thanks so much for your time this evening. Despite that marginal increase from December, I suppose the sentiment is pretty low at the moment.

PEGGY DRODSKIE: It’s very low, it’s scathingly low. We are very concerned that there just not seem to be any sign of an uptick.

SIKI MGABADELI: Now, I know that Eskom has told that we are going to be facing load-shedding for a considerable period, but how can it make things more predictable, much easier for businesses to operate?

PEGGY DRODSKIE: Well, generally speaking, it’s not Eskom that is causing…the problems for our members. Our members are largely the consumers that get electricity direct from the local authorities. It is at the local levels where the schedules are not adhered to, and our members have told us quite categorically that: “We can cope much better if we know exactly when the electricity is going to be off, and when it’s going to come on again. And if it is too erratic and we don’t know when that’s going to happen, then it really causes us…problems.”

SIKI MGABADELI: So it’s literally about – if you are going to do it, tell us when it’s going to happen and then stick to the schedule so we can plan around it.

PEGGY DRODSKIE: That is exactly what they are asking for.

SIKI MGABADELI: Would you say that smaller businesses are hardest hit by this?

PEGGY DRODSKIE: The small businesses definitely are hard-hit, but it’s really to think about the activity that the businesses are engaged in. If it is a manufacturing business, where the process requires a continuous supply of electricity from start to the end of the production of that product, then it is very serious when the electricity goes off halfway through that process, because very often what happens then is it cannot be started up again and there is lost material as well as lost time and productivity.
   Some of our members are telling us that they are working with plastic extrusions and when the electricity goes off that plastic hardens on the machinery and it can take them up to three days to clean the machines.

SIKI MGABADELI: Goodness!. You’ve called, Peggy, for an electricity summit. What do you hope to achieve with that?

PEGGY DRODSKIE: Well, it’s more than an Eskom problem. It’s a national problem. And in order to solve national problems you need the brains that are available in the country to get together and thrash out possibilities. We need to see what is put on the table. There are many, many ideas. … Let’s go though them, let’s have a look and see whether implementation is possible. And if implementation is possible, will it make a material difference, and how can we determine which indicators and which parts of the economy and which ideas are workable and which can actually assist and alleviate… [the problem].

SIKI MGABADELI: All right, We’ll leave it there, Peggy, thank you. The line is not the best line we’ve ever had.
   That’s the thing, David, that companies want to be able to plan around things. We can deal with the fact that we are not going to have lights, because we’ve kind of accepted that that’s the reality, there is not very much we can do about it. But predictability and being able to plan properly – if you know that the lights are going to be off between ten and two, you can ask your employees to come in a bit later or a little bit earlier and do some tasks from home.

DAVID SHAPIRO: I don’t think we are a country that knows how to deal with a crisis, and this is a crisis – and that’s what Peggy says. We see what’s happening and she mentions her concern about sentiment in the market, and I think sits beginning to get to all of us, because you drive and the robots are out and there is traffic and you become frustrated, you become angry.

SIKI MGABADELI: And you are late for a meeting…

DAVID SHAPIRO: All those issues that are starting to build up and we need crisis management. We don’t know how to handle it. We know how to toyi-toyi, and we know how to protest and kick over dustbins and that, but we don’t know how to handle a crisis. I think it’s a very, very serious problem. I’m surprised the rand is where it is. I’m absolutely surprised.

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