The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) remained “virtually unchanged” at 95.1 index points in January, compared with the 95.2 points recorded for December 2018.

The BCI was, however, 4.6 index points lower than the 99.7 recorded in January 2018.

The exceptional level of the BCI in January last year was, to a large extent, based on expectations of better business prospects following former President Jacob Zuma being succeeded by President Cyril Ramaphosa as the African National Congress’s leader, in December 2017.

According to Sacci, the BCI continued to level out and move sluggishly during 2018 owing to a minimal amount of real progress in economic performance, with recessionary conditions being experienced during two quarters of the year.

Further attention was drawn to the extent of the redress necessary to address the prevalence of maladministration and corrupt practices that impacted negatively on the economy and the business environment, Sacci said in a statement on Wednesday.

Unfortunately, nine of the thirteen subindices of the BCI were worse off in January 2019 than than they were in January 2018.

However, in general, the assessment is that the economy and the business climate are better placed for an improved performance, Sacci pointed out. “The realism of challenges facing the economy has clearly emerged while the ability of the economy to adhere to expectations is more sobering.” 

Meanwhile, the month-on-month movements of the BCI subindices remained irregular with January 2019 being no exception.

Three of the seven real-activity subindices and two of the six financial subindices had positive month-on-month impacts on the BCI in January.

The main positive month-on-month effects were increased real retail sales, the increased real value of building plans passed, and the stronger rand exchange rate.

Higher share prices on the JSE also contributed positively to the BCI in January compared with December 2018, while merchandise import and export volumes and new-vehicle sales had notable negative month-on-month effects on the BCI in January.  

“Although the BCI appears to have stabilised, investor confidence remains the panacea to higher economic growth in 2019 and beyond. Dealing effectively with institutions and individuals involved with adverse business practices in the public domain becomes an important element for restoring confidence,” the BCI warned, adding that, of equal importance is attracting investors by implementing commitments made in Davos.

President Ramaphosa recently attended the annual World Economic Forum meeting, in Davos, wherein he and a government delegation tried to sell the country as an investment destination, stressing that South Africa is “the most developed, diversified, technologically advanced and industrially integrated economy on the African continent”.

Looking ahead, the 2019 Budget Speech, to be delivered by Finance Minister Tito Mboweni on February 20, provides a timeous and ideal opportunity to pursue the right investor-friendly climate, Sacci concluded.