Johannesburg | Tuesday
SOUTH Africa’s Chamber of Business said on Monday its business confidence index (BCI) was unchanged in August at 109 points, with components equally split between positive and negative moves during the month.
Sacob chief executive Kevin Wakeford said positive trends in bond yields and inflation countered negative trends in exchange rates, precious metals prices, and regional events such as a two-day strike against privatisation at home and Zimbabwe’s deepening political crisis.
”The economy has performed remarkably well given the circumstances of the month of August,” he told reporters.
Last week, the rand hit record lows against the dollar and pound as markets fretted over contagion concerns fanned by Zimbabwe’s illegal land grab, which has worsened the neighbouring country’s economic crisis.
News that President Robert Mugabe had accepted a Nigerian-brokered deal to halt white-owned farm seizures in exchange for financial support from former colonial power Britain has so far been met with a wary response from investors.
Wakeford repeated SACOB’s view that more needed to be done to boost growth in South Africa’s economy, which lags well behind the five to eight percent rate seen in most other emerging markets.
”Sacob feels that a further lowering of interest rates should be priority and that such a move should stimulate still sluggish domestic demand and provide a positive outlook for small and medium-sized business,” he said.
Sacob said that it had produced a survey, which will be repeated on a quarterly basis, of business views on the priorities which need to be addressed for the economy to gather momentum.
Crime and corruption topped the list of six main concerns, cited by 17,6% of the survey’s 35 respondents.
It was followed by government service delivery with 14,9%, labour laws with 11,7%, promotion of foreign investment with 10,7% and productivity and education with 8,8%. Land reform was at the bottom of the list, with just a 0,8% weighting. – Reuters