BUSINESS MAVERICK

Business confidence in South Africa at all-time low in 2020

By Ed Stoddard 10 February 2021

Construction cranes are seen over a multi store complex being build in the country's biggest city, Johannesburg, South Africa, 06 March 2018. (Photo: EPA-EFE/KIM LUDBROOK)

In 2020, average business confidence in South Africa was worse than it was in the mid-1980s, when the apartheid regime imposed a State of Emergency, sanctions were biting the economy and capital was in full flight. The Covid-19 pandemic has been a confidence-shattering event.

The South Africa Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) averaged 86.5 in 2020, the umbrella business group said on Wednesday. That was the lowest annual average since the BCI was launched in 1985.

“During the economic sanctions period of the 1980s, the 1985 BCI measured the second-lowest average of 91.5, followed by an average of 92.6 in 2019. The highest annual average for the BCI was recorded in 2006 at 137.5,” Sacci said in a statement. In May 2020, it reached its lowest monthly level ever at 70.1.

Of course, 2020 was an exceptional year, and globally confidence indices were driven into the ground under the weight of the pandemic and the lockdowns to curtail its lethal spread. But 2019 now stands as the third-worst average reading of the index, while 2006 was the peak of confidence. That high was scaled under the Thabo Mbeki administration, which for all of its failings (Aids, Zimbabwe) kept a steady hand on the economic tiller and kept borrowing requirements low. There were plenty of critics then and now about its relatively business-friendly approach to the economy, but economic growth and business confidence were all on the up and up then.

By contrast, the damage wrought under the lost Jacob Zuma decade is still taking its toll, and the Cyril Ramaphosa government is sinking in the swamp left behind. The 2019 average – which was pre-pandemic – had been the previous worst since 1985. The year 2019 was marked by recession, Stage 6 load shedding, and already declining levels of investment. President Ramaphosa amassed a fortune in the world of business, but his administration is not inspiring confidence in the business world.

The index has been rising slowly of late, but at 94.5 in January – up 0.2 points from December – it is still hardly shooting for the stars. DM/BM

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"Information pertaining to Covid-19, vaccines, how to control the spread of the virus and potential treatments is ever-changing. Under the South African Disaster Management Act Regulation 11(5)(c) it is prohibited to publish information through any medium with the intention to deceive people on government measures to address COVID-19. We are therefore disabling the comment section on this article in order to protect both the commenting member and ourselves from potential liability. Should you have additional information that you think we should know, please email [email protected]"

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  • “The Ramaphosa Government is sinking in the mire!”
    The only long term solution is to trim the rotting fat from the organisation.
    Long term gain from short term pain! Let the stealing rotten element blend with the self seeking, disinformation spreaders known as the EFF (Every Felons Friends)

  • Doing the same thing over and over again and expecting a different result is at least the very height of insanity. When will our leadership become the brave ones who look to the green economy for growth, stop measuring GDP on economic growth – it cannot be sustained. We have so much potential to be different, to do things differently and to make a difference but we just don’t seem to have the leadership to get us there. How I dislike politicians, I really do.

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