Removing policy uncertainty key to lifting business confidence - SACCI
8 Aug 2018 - by
Business confidence in South Africa edged up in July, but a sustained improvement depends on removing economic policy uncertainties, business group SACCI said on Wednesday.
The South African Chamber of Commerce and Industry's (SACCI) business confidence index ticked up to 94.7 in July from 93.7 the previous month.
The biggest positive month-on-month influence on the BCI were merchandise export volumes, lower inflation and real retail sales, while merchandise import volumes, the decline in precious metal US-dollar prices and the number of new vehicles sold made the largest negative month-on-month impact.
"Although there are still major economic challenges facing South Africa, it appears the downward trend in the business climate since February 2018, has lost its momentum and confidence could turn more positive," SACCI said.
"This mainly depends on the removal of economic policy uncertainties and the nurturing of all global economic relations for the benefit of South Africa and all its people."
The February inauguration of former businessman Cyril Ramaphosa as new South African president to replace scandal-plagued Jacob Zuma brought renewed optimism for the country, but critics say he has so far done little to put the economy on a better footing.
SACCI noted that the International Monetary Fund had, in its latest Article IV report on South Africa, raised several critical matters including the possibility that the ongoing debate on land reform could undermine the government's efforts to attract investment and that plans to expropriate land without compensation may worsen uncertainty about property rights.
The IMF also said economic growth was insufficient to raise per capita income, while unemployment remained unacceptably high and the labour market needed reform.
"The matters raised by the IMF in its Article IV report have already been noted by several role players in the economy," SACCI said.
"However, the execution of policy and removal of structural economic constraints require a longer-term approach. Addressing political uncertainty and the implementation of a suitable economic policy framework, however, should be a short-term priority."