OPERATING

CONTEXT

OPERATING CONTEXT

SAICA continues to operate in a dynamic operating context. This context is defined by the global and local drivers that influence our ability to function, as well as the macro-economic factors in South Africa. In some instances, our direct control of these is limited, but we consider the trends to make strategic choices and leverage opportunities to make a difference for long-term sustainability and value creation.

SAICA continues to operate in a dynamic operating context. This context is defined by the global and local drivers that influence our ability to function, as well as the macro-economic factors in South Africa. In some instances, our direct control of these is limited, but we consider the trends to make strategic choices and leverage opportunities to make a difference for long-term sustainability and value creation.

SOCIO-ECONOMIC CHALLENGES

The South African economy is struggling, and the political climate is volatile

The South African socio-economic context is characterised by:

  • Low gross domestic product (GDP) growth and high levels of unemployment
  • Inflation driving higher interest rates and constraining spending
  • Ongoing load-shedding that is causing significant disruptions to the economy as well as increasing the cost and affecting the ease of doing business
  • Public infrastructure deterioration and poor service delivery
  • Social instability persists as rising inequality and youth unemployment continues
  • An unstable political climate as the country approaches the next election in 2024
  • The weak rand further contributing to the sluggish economy
  • Corruption continuing and slow progress in prosecutions evolving from the Zondo Commission, with some members implicated in the commission’s report

CHALLENGES

Socio-economic challenges are characterised by high unemployment levels increasing, disrupted energy supplies − an unreliable power source and the effect on the economy, water shortages, a deteriorating infrastructure, rising corruption, the threat of a failed state, a lack of accountability, governance and productivity, service delivery protests, an increase in immigration, outcomes of the Zondo Commission and implications for the profession

OUTLOOK

  • Subdued economic growth of 0.3% is expected in 2023, and 0.7% and 1.0% in 2024 and 2025 respectively (Source: SA Reserve Bank)
  • Unemployment remains high (around 35%) and youth unemployment exceeds 50%
  • Spending pressures are increasing to close the financing gap in health, infrastructure and higher education
  • Political instability is expected to persist leading up to the national elections in 2024

HOW THIS AFFECTS OUR STRATEGY

  • SAICA depends on member fees for revenue and donations to fund projects addressing national imperatives. Pressure on business and members represents a risk in accessing sufficient financial capital to execute on our strategy. Where necessary, we engage with members to address non-payment of fees
  • We emphasise the importance for the sustainability of the profession and society of our strategic focus in contributing to national imperatives. We also engage with government as a key stakeholder and have a number of projects to support the effectiveness of the public sector
  • SAICA amended the by-laws required to streamline the disciplinary process. A total of 218 disciplinary complaints were concluded during the year and we continue to follow up allegations of member involvement in corruption arising from the Zondo Commission report
  • SAICA hosted an anti-corruption summit involving key stakeholders to devise solutions to address issues raised by the commission and contribute positively to the broader fight against corruption
  • SAICA recognises that it, its members, and all other business enterprises constitute our country, along with government and civil society. If we want a successful country, we must contribute towards the achievement of this, recognising that it is irresponsible to expect that government should undertake the fulfilment of this on its own. As a result, the outcomes of the Economic Conference hosted by SAICA in KwaZulu-Natal informed an Economic Blueprint incorporating proper economic development initiatives to grow the South African economy. The blueprint document will influence SAICA strategy, driving the economic relevance of our profession, and creating an ecosys­tem for members to get involved and make a difference via the Difference Makers campaign.

CAPITALS
AFFECTED

MATERIAL MATTERS AFFECTED

STRATEGIC INITIATIVES AFFECTED

TOP RISKS
AFFECTED

SOCIO-ECONOMIC CHALLENGES

The South African economy is struggling, and the political climate is volatile

The South African socio-economic context is characterised by:

  • Low gross domestic product (GDP) growth and high levels of unemployment
  • Inflation driving higher interest rates and constraining spending
  • Ongoing load-shedding that is causing significant disruptions to the economy as well as increasing the cost and affecting the ease of doing business
  • Public infrastructure deterioration and poor service delivery
  • Social instability persists as rising inequality and youth unemployment continues
  • An unstable political climate as the country approaches the next election in 2024
  • The weak rand further contributing to the sluggish economy
  • Corruption continuing and slow progress in prosecutions evolving from the Zondo Commission, with some members implicated in the commission’s report

CHALLENGES

Socio-economic challenges are characterised by high unemployment levels increasing, disrupted energy supplies − an unreliable power source and the effect on the economy, water shortages, a deteriorating infrastructure, rising corruption, the threat of a failed state, a lack of accountability, governance and productivity, service delivery protests, an increase in immigration, outcomes of the Zondo Commission and implications for the profession

OUTLOOK

  • Subdued economic growth of 0.3% is expected in 2023, and 0.7% and 1.0% in 2024 and 2025 respectively (Source: SA Reserve Bank)
  • Unemployment remains high (around 35%) and youth unemployment exceeds 50%
  • Spending pressures are increasing to close the financing gap in health, infrastructure and higher education
  • Political instability is expected to persist leading up to the national elections in 2024

HOW THIS AFFECTS OUR STRATEGY

  • SAICA depends on member fees for revenue and donations to fund projects addressing national imperatives. Pressure on business and members represents a risk in accessing sufficient financial capital to execute on our strategy. Where necessary, we engage with members to address non-payment of fees
  • We emphasise the importance for the sustainability of the profession and society of our strategic focus in contributing to national imperatives. We also engage with government as a key stakeholder and have a number of projects to support the effectiveness of the public sector
  • SAICA amended the by-laws required to streamline the disciplinary process. A total of 218 disciplinary complaints were concluded during the year and we continue to follow up allegations of member involvement in corruption arising from the Zondo Commission report
  • SAICA hosted an anti-corruption summit involving key stakeholders to devise solutions to address issues raised by the commission and contribute positively to the broader fight against corruption
  • SAICA recognises that it, its members, and all other business enterprises constitute our country, along with government and civil society. If we want a successful country, we must contribute towards the achievement of this, recognising that it is irresponsible to expect that government should undertake the fulfilment of this on its own. As a result, the outcomes of the Economic Conference hosted by SAICA in KwaZulu-Natal informed an Economic Blueprint incorporating proper economic development initiatives to grow the South African economy. The blueprint document will influence SAICA strategy, driving the economic relevance of our profession, and creating an ecosys­tem for members to get involved and make a difference via the Difference Makers campaign.

CAPITALS
AFFECTED

MATERIAL MATTERS AFFECTED

STRATEGIC INITIATIVES AFFECTED

TOP RISKS
AFFECTED