As the economic climate begins to warm up, a survey has revealed businesses in Botswana as among the most optimistic in the world despite having been bruised by a harsh 2009.
According to the International Business Report (IBR) survey, conducted by global accountancy and consultancy firm, Grant Thornton, Privately Held Businesses(PHBs) in India, Australia and Chile are the most optimistic in the world scoring over 70 percent in the global optimism/pessimism index for 2010, while countries such as Botswana, South Africa and China come second with scores of over 60 percent.
"Businesses in Chile, India, Australia, Vietnam and Brazil are the most optimistic in the world, all scoring over 70 percent.
"Close behind are Botswana, South Africa, mainland China, Singapore, Canada and Hong Kong, which showed the biggest swing of sentiment from 2009, at 60 percent or higher," reads the report.
What is however standing out from the survey is Botswana's huge sway in business optimism from 2009 as the country fell victim to the recession and is still on the recovery path.
In 2009, countries such as Australia, mainland China, India and Vietnam, which are among the most optimistic in the survey, managed to avoid the recession while Brazil, Hong Kong, Canada and New Zealand suffered a relatively minor recession.
The survey, which sampled 7,400 PHBs across 36 economies, now in its 18th year, also highlights a group of ten economies where businesses are more optimistic about the outlook for their economies than International Monetary Fund (IMF) forecasts might suggest was done.
Commenting on the survey results specific to Botswana, Jay Ramesh Managing Partner of Grant Thornton in Botswana said, "It is heartening to see the continued optimism of the business community of Botswana.
It appears that most businesses in the non-mining sector have positioned themselves well for better business opportunities in the current year as compared to 2009.
"With the mining sector on the path to recovery during 2010, a better implementation schedule by the government ministries should keep the private sector busy. Though there is speculation that government has cut back heavily on budgets to reduce the budget deficit, the efficiency
The results of the Grant Thorton survey are in line with those of the Bank of Botswana business confidence report which revealed business confidence to be significantly higher in 2010 as both domestic and international conditions improve.
In a summary report of the Business Expectations Survey (BES) conducted by the Bank of Botswana, business confidence went up to as much as 59 percent in 2010 from just 40 percent in 2009.
Interestingly as well, business in the sampled countries have higher confidence levels for 2010 than those predicted by the International Monetary Fund.Alex MacBeath, global head of markets at Grant Thornton International, said, "The question is whether businesses in these economies can forecast their future more accurately than the IMF.
Many governments, on reading these results, will hope their business community is right and that their GDP in 2010 will outstrip IMF forecasts as a result."
Alex MacBeath comments, "The survey suggests that during the recession businesses have become leaner and more cost effective which may enable them to lower prices while still securing increased revenues and, crucially, profits.
As the global economy emerges from recession, we are likely to see many businesses reaping the rewards of recession-induced efficiencies to lead the way in the upturn.
Many people blamed globalisation for the speed of the downturn but we are now seeing that globalisation may also help us accelerate out of recession."
The survey also found that expectations of increased revenues in 2010 came out highest (at 40 percent) when respondents were asked to rank likely business trends in 2010.
Increased turnover was followed by the surprisingly positive view that investment in plant and machinery (31percent) and profitability (29percent) would both increase. Businesses were much less hopeful about selling prices with 21 out of 36 economies less optimistic about increasing their prices than they were in 2009.