The business landscape is a minefield of challenge
Nedbank

Greg Campbell

The domestic economic environment has been extremely challenging for all businesses. A number of household names in the construction sector, for example, have succumbed to economic pressure, aligned to the low demand in the manufacturing sector and the steel industry, compounded by unprecedented hardship experienced by consumers.

The past decade reflects low levels of fixed investment to expand the economy, due to the lack of confidence and uncertainty in the country. This is evidenced in the sluggish gross domestic product (GDP) growth, an unemployment level of 29%, a debt to GDP ratio of 57%, a sustained risk of a downgrade in our sovereign risk rating to junk status, and numerous state-owned enterprise bailouts, which will put additional pressure on the country's debt levels over the ensuing years. These factors provide for an extremely challenging business environment. With transformation in South Africa being crucial to ensuring an inclusive society, supporting aspirant entrepreneurs to achieve their ambitions and addressing unemployment and poverty, the need for specialised expertise is unquestionable.

The Investment Climate in South Africa Discussion Paper, recently released by the European Chamber of Commerce and Industry of Southern Africa, provides insight on some of the key challenges facing businesses today.

The paper proposes some measures that could improve investor confidence, including the following:

A reshaping of certain broad-based black economic empowerment requirements that would trigger increased foreign direct investment.

A recalibration of procurement policies to achieve the intended policy goals related to transformation, without hurting productivity and competitiveness.     

The tackling of skill constraints through a combination of short-term solutions, such as the easing of immigration regulations, and long-term reforms in education.

The removal of regulatory hurdles for the benefit of independent power producers and public-private partnerships to resolve infrastructure constraints.

While measures to stimulate the economy are essential, it is financial expertise that can help take a business to the next level. It is about acknowledging that running and managing a medium-to-large business is not easy. As the paper and other studies show, the business landscape is a minefield of challenges – and opportunities. It calls for informed decision making, strategy that is focused and brave calls in tense moments and tough times.

Business owners often look for expert guidance to help them see the bigger picture and formulate long-term strategies together. To help grow a business through acquisitions, expansionary finance or investment in sustainable environmental solutions, business owners require specialised finance solutions.

The Specialised Finance team at Nedbank Business Banking has for the past decade supported a client in an exciting journey to develop and scale a long-term project to facilitate the recycling of 'post-consumer', polyethylene terephthalate (PET) products to avoid the disposal of these products into landfill sites. The team is currently in its third round of project finance, assisting the client to further scale the business. The client's long-term vision aligned perfectly with Nedbank's own strategy of ensuring a responsible approach towards a sustainable environment.

Understanding the complexities of client needs is the first step towards determining the solution. In a complex environment Nedbank Business Banking has a team of highly skilled and experienced acquisition and leverage financiers to partner and guide business owners in matching appropriate finance solutions or services to a range of financial needs.

Nedbank's Specialised Finance team comprises specialists seeking innovative solutions to complex challenges. An example that speaks to complexity and the need for expertise was the team's support for a client's transaction that would result in transformation of ownership of a large mining supplies firm. The team, through having a thorough understanding of the business, was able to support the business in its growth and transformation aspirations by facilitating the negotiation of the structure and terms of the complex transaction. The team was able to guide both the seller and buyers through the process to agree and conclude an agreement, beneficial to both parties.

While helping our clients realise their aspirations, we aim to grow the economy sustainably, particularly ensuring that our efforts contribute to growth and help create jobs. No problem is insurmountable.

Why not partner with a team of highly knowledgeable specialists who see the bigger picture by finding innovative solutions around complex challenges such as renewable-energy financing, recycling and water treatment initiatives to transform your business?

Contact one of our Specialised Finance business banking experts to find out how Nedbank Business Banking can partner with your business to see the bigger picture and formulate long-term strategies together. Send an email to Greg Campbell at GregoryC@Nedbank.co.za. 

Greg Campbell is National Head of Specialised Finance at Nedbank Business Banking.

This post is sponsored, written and provided by Nedbank Business Banking.