JOHANNESBURG, Owners of small businesses in South Africa should brace themselves for a low growth phase in the economy, says the head of Strategic Business Development at First National Bank, Stephanus Buys.
Noting that gross domestic product (GDP) growth has been slow while consumer confidence has dipped, he said here Wednesday that people were not willing to spend because of uncertainty in the political environment and a lot of areas which stemmed from it.
“And then on the other side there’s also the business perspective where we see businesses holding more cash and even if they were to invest, they’re trying to figure out where things are going from a political perspective and also from a broader economic perspective,” added Buys.
Meanwhile, political uncertainty had caused a significant drop in consumer confidence, said Buys, adding that low consumer confidence had negatively impacted on inflation and the ripple effect had reached small businesses.
He said small and medium enterprises (SMEs) needed to take precautionary action to ensure they emerged from the low growth phase.
Planning is absolutely required, especially from a financial perspective, to understand your cash flow needs to make sure that you put the money aside for expenses that needs to be serviced in the future,” he added.
“It’s a very difficult balancing act for a lot of these companies purely because they are time-constrained and resource-constrained, but for the most part, it’s very much a hands-on approach specifically on a strategic perspective that will assist them in the long term to show good growth.
Source: NAM NEWS NETWORK