Young Presidents’ Organization: Economic Confidence in Africa Plummets to New Six-Year Low

| February 9, 2016

YPO Global Pulse Economic Confidence Survey Indicates Confidence in Africa Has Plunged 10 Points in the Past Two Years

JOHANNESBURG, South Africa, Feb. 8, 2016 (GLOBE NEWSWIRE) — Economic confidence amongst business leaders in Africa plunged in the final quarter of 2015, falling to its lowest recorded level in six years, and below that of every other region in the world. The YPO Global Pulse Confidence Index for Africa, which tracks economic confidence levels amongst CEOs in the region on a quarterly basis, fell 3.3 points to 51.0, its lowest level in the history of the survey.

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Having recorded the highest levels of confidence in the world, peaking in 2013, Africa now finds itself the most pessimistic region in the world, for the first time.

Confidence in Africa trails the global composite reading of 58.0 by a full 7.0 points.

The decline in confidence within the region is largely due to a significant drop in optimism within Nigeria. In the wake of plummeting oil prices, Nigeria’s economic confidence collapsed by 17.4 points to 30.7, following a 5.6-point decline in the third quarter. However, the fall in confidence was widespread throughout the continent. South Africa, which has the highest weighting in the YPO survey, lost 2.7 points, coming in at 55.3, its lowest level since the second quarter of 2009. Zimbabwe dropped 5.8 points to 43.2. Of the major African economies, only Kenya reported increased levels of confidence, climbing 6.2 points to 55.7.

“While Africa seems to befeeling economic strain and facing unfavorable conditions , oil-exporting countries, including Nigeria and Angola, have been particularly hard hit,” said Ted Galante, CEO of Zimbabwe Mortgage Company (Pvt.) Ltd. and regional vice chair for WPO Africa, YPO’s graduate group. “The situation is unlikely to improve in the year ahead, and CEOs will be remain cautious and watchful.”

Globally, economic sentiment measured by the YPO Global Pulse Index for the last quarter of 2015 remained relatively stable, landing at 58.0, its lowest level since the third quarter of 2011, at the height of the global economic recession. Confidence in the United States remained relatively optimistic at 59.1, and the European Union remained almost unchanged, edging up 0.3 point to 60.5, marking a steady improvement in EU confidence over the past several years. Only Asia, which climbed 2.4 points to 59.7, and Latin America, which jumped 4.8 points to 54.4, recorded any material increase in confidence.

Key findings in Africa

Tough economic conditions unlikely to improve in the short term.

Almost half (49%) of CEOs in Africa expected that the economic and business conditions affecting their organisations would deteriorate further over the first half of 2016. This is set against only 18% who predicted an improvement in conditions, and a third (33%) who expected to see little or no change.

CEOs becoming concerned about their own organisations’ prospects.

The latest survey also indicated that CEOs in Africa are becoming more concerned about their own organisations’ prospects for growth and investment in 2016.

The YPO Global Pulse Sales Index for Africa dropped 3.4 points to 61.4, its lowest reading since October 2009. Whilst 56% of CEOs still expected to see increased revenues in the year ahead, 18% expected to see a decline. This compares to 66% who expected to see improvements and only 10% who expected a reduction in sales last quarter.

It was a similar story for the two other components of the index, measuring hiring and investment. The YPO Global Pulse Fixed Investment Index for Africa fell 3.5 points to 55.9, whilst the YPO Global Pulse Employment Index for Africa slipped 0.4 point to 52.5 Twenty percent of CEOs expect to decrease hiring in the next 12 months, compared to 13% in October

YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of January 2016, gathered answers from 1,994 chief executive officers across the globe, including 129 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world

About YPO
YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Lifelong Learning and Idea Exchange(TM). Founded in 1950, YPO today provides 23,000 peers and their families in 130 countries with access to unique experiences, extraordinary educational resources, access to alliances with leading institutions, and participation in specialized networks to support their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate US$6 trillion in annual revenues. For more information, visit www.ypo.org.

CONTACT: YPO (Young Presidents’ Organization)
Linda Fisk
Office: +1.972.629.7305 (United States)
Mobile: +1.972.207.4298
press@ypo.org

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