Business confidence in South Africa is plumbing new depths and is now lower than at the height of apartheid in the mid-1980s.
This is according to the South African Chamber of Commerce and Industry (SACCI) which said that average business confidence in 2020 was lower than in 1985, when internal unrest and sanctions against apartheid were at their height.
SACCI’s business confidence index is made up of 13 separate measurements which use retail and vehicle sales, share prices, and the exchange rate amongst others. The current index uses 2015, with a score of 100, as its base year.
Business confidence averaged 86.5 in 2020, the lowest since 1985 when the index started, and when business confidence was at 91.5. The third worst year was 2019 when the index was 92.6.
The record high for the index occurred in 2006 when the index was 137.5.
The lowest-ever score on the index was in May last year when business confidence was at 70.1. Business confidence recovered somewhat by December to a score of over 90. The first month of this year also indicated business confidence was improving slightly with a score of 94.5.
In a statement SACCI said that the only way South Africa could tackle issues such as rapidly rising debt was to ‘enhance private-sector fixed investment, provide credible economic policy that improves confidence in economic growth prospects, and reduce the role of the state to lessen borrowing levels and public debt-servicing costs’.