File image: IOL
File image: IOL

SA business confidence index edges up in cautious elections climate

By ANA Reporter Time of article published May 7, 2019

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JOHANNESBURG -  Business confidence in South Africa improved slightly in April, although national elections due on Wednesday have  created an unpredictable economic environment for the next month or two, a survey published on Tuesday showed.

The South African Chamber of Commerce and Industry's (SACCI) business confidence index for April 2019 improved by 1.9 index points to 93.7 compared to March.

The survey was published on the eve of national elections in which the ruling African National Congress is expected to hold on to power, although its majority could be reduced as the country grapples with anaemic economic growth over the last decade.

"The upcoming elections create an unpredictable economic environment for the next month or two," SACCI said.

"The likely outcome of the elections is not difficult to speculate on to the extent that policy certainty is not in doubt. Effective implementation of these policies is more in doubt as it depends on the extent of President Cyril Ramaphosa’s victory within the ANC than the ANC’s own victory."

SACCI warned that the once-off nature of political campaign activities that included high expenditure on printing and advertising "may lull one to a false sense of comfort about business confidence".

It also cautioned that the current absence of rotational blackouts by state-owned power utiity Eskom, which has struggled to meet demand, was by no means an indication that all was well at the struggling company.

"Yet the benefit of this absence, increased campaign spend and other favourable events benefit businesses and increase business confidence," it said.

"Although once-off, the benefit cannot be taken for granted, it is most welcome by business."

- African News Agency (ANA) 

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