Elections boost business confidence
The SA Chamber of Commerce and Industry (Sacci) Business Confidence Index surged 1.9 index points to 93.7 points last month compared to March.
Sacci chief executive Alan Mukoki said the outcome of the elections should bring more clarity to business and enhance better planning and decision-making.
“The pending national and provincial elections have cautioned business in taking medium-term views and positions - notably on investment,” Mukoki said.
“The outcome of elections should, however, bring more clarity to business and enhance longer-term decisions. Business and investor confidence will become pivotal to the economy and the business climate in the second half of 2019.”
The index, which reached a two-and-a-half-year high of 99.7 points in January last year following the ascension of President Cyril Ramaphosa as leader of the ANC, went on the back foot as Eskom’s financial and operational woes took their toll on the ailing economy.
Investec chief economist Annabel Bishop said the markets had already priced in an ANC win.
“Markets expect a rally on a strong ANC win, with potentially marked rand strength,” she said.
The next administration, which is expected to be announced in the next few days, will also have the huge task of growing an economy that has not grown beyond 2 percent since 2013.
Ramaphosa’s first full year in office saw the economy grow by a pedestrian 0.8 percent, while the Reserve Bank and National Treasury both expect growth this year to be way below the 2 percent mark.
Unemployment has stubbornly remained above 26 percent for the duration of the fifth administration.
Steel and Engineering Industries Federation of Southern Africa chief executive Kaizer Nyatsumba said he was hopeful the new administration would tackle rampant corruption.