GIBS Conference on the 2015 economic outlook: Abdullah Verachia – CEO, The Strategists

The risks, the opportunities and the impact on business this year.

SIKI MGABADELI: The Gordon Institute of Business Science hosted a seminar today looking at South Africa’s economic outlook for 2015 – the risks, the opportunities and the impact on business.
   For a look at some of the outcomes we’ve got Abdullah Verachia, who is the chief executive officer of The Strategists and a GIBS faculty member. Thank you so much, Abdullah, for your time this evening.
   Before we talk about your specific session that you hosted this morning, what was the overall feeling about the economic outlook for South Africa this year at the seminar?

ABDULLAH VERACHIA: Good afternoon, Siki, and thanks for having me. The focus of the session today was really to look at where the South African economy is and I think it was a mixed bag. On the one hand there was quite a bit of negative sentiment around the socio-economic challenges that we face. One, as we all know, the elephant in the room, is Eskom and the concomitant indications of load-shedding across various parts of the economy, especially the impact on business, be it small, medium or large.
   But then we also spoke about the impact of the decline in the oil price and what that would mean, as we know that next week we’ll get a further reduction of possibly a rand on the oil price and what that means for businesses and consumers. I think one of the key narratives that came out in the discussion this afternoon was really what would that mean for consumers at the base of the pyramid. Will we see a reduction in terms of the costs of goods and services in the retail sector, and will we see a reduction in terms of transport costs for individuals, because that will fundamentally impact on the pocket. I think we’ll see the impact in terms of individuals who have cars, etc, because their fuel bill will be less, but will we see the requisite impact for individuals who use public transport?

SIKI MGABADELI: Let me tell you – in the years I used a taxi I don’t ever remember price decreases. I can tell you that for free!
   Also then let’s talk about businesses because you looked specifically at building and executing business strategies. So in an environment that is so mixed, which is in flux, how does a business build a strategy?

ABDULLAH VERACHIA: Sure. My session looked at the issue of competitiveness. And when we talk about competitiveness, I often say that the Business School speaks to the fact that we have three levels of competitiveness, three lenses, if you want to put it that way.
   Firstly, individual competitiveness – how competitive am I as an individual in terms of my career trajectory, given the complexity of the environment that we find ourselves in?
   That feeds into this concept of company or organisational competitiveness – how competitive is my company in comparison to some of the other companies within the sector or space I operate in?
   And that often leads into the issue of country competitiveness. So we mix that together in terms of understanding where the country is going from a competitiveness perspective – how do the issues of unemployment and income inequality impact on business strategy?
   And then we looked at this concept of company competitiveness … [line lost].

SIKI MGABADELI: Sorry about that lost line. It was very interesting. They had a number of sessions today. The conference was moderated by Professor Adrian Saville, the chief investment officer at Canon Asset Managers and also a lecturer at GIBS. They looked at economic insights, an overview of the global and the South African macro economy, the current conditions of the outlook for the year and then specifically how businesses big and small can shift priorities and weather the economic storm in order to put themselves in a position for future growth.

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