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The South African Chamber of Commerce and Industry, SACCI, said the advent and outcome of the national and provincial elections has had a notable effect on business confidence.
SACCI said the BCI dipped 5.8 index points in April to 108.9, and then dropping further to 107.8 in May, a decline of 6.9 points over the two months.
Senior economist, Richard Downing, said the formation of the new government, given the election results, will largely determine the future course of business confidence.
“The recent parliamentary and provincial elections had an insightful outcome, implying a change in the political guard.
“This adjustment could have unwarranted and unintended consequences for the economy and the well-being of South African citizens.
“Political stability and policy certainty will be fundamental assurances that drive business and investor sentiment,” Downing said.
SACCI said South Africa has an opportunity and duty to set the economy on the road to recovery through responsible and accountable governance.
“The public and private sectors, as well as citizens, should exercise their respective duties and abilities in line with the constitution and sound economic values and perspectives.
“The political deviousness of parties during the election process should give way to pragmatism and reality that serve future economic improvement, performance, prosperity, and inclusiveness,” Downing added.
Meanwhile, SACCI said in the short-term (month-to-month), three sub-indices negatively impacted the business climate in May 2024, outweighing the three neutral and eight minor positive effects of the other sub-indices.
“The decrease in overseas tourists and the decline in merchandise import volumes particularly weighed on the BCI in May, while the main but modest positive impacts came from merchandise export volumes and new vehicle sales,” Downing said.
Over the year to May 2024, the SACCI BCI increased by 0.9 points to 107.8 from 106.9 in May 2023. Inward tourism and the improved rand exchange rate had the largest positive year-on-year impact on the SACCI BCI in May 2024.
The Chamber said positive effects also came from the higher global price of precious metals and lower inflation.
“The almost unchanged year-on-year SACCI BCI suggests a probable regressive business climate due to possible unwarranted political developments.”
