A third of CEOs plan to invest in Africa in the medium term, despite confidence in South Africa being at all-time lows.

This is according to the quarterly Merchantec Confidence Index, released on Tuesday.

Of the CEOs who participated in the quarterly survey, 54% said they were investing in South Africa, while 34% said they were investing in the rest of Africa. 

Other investment destinations include Europe (11.2%), followed by 9.5% of CEOs who said that the UK would be their investment destination of choice.

The index recorded a 0.40% increase in CEO confidence between the second and third quarters of this year, which remains at a score below the 50-point neutral mark.

Most of the surveyed CEOs believed the economy to be stagnant, with decisions placed on hold as a result of future policy uncertainty and concerns over a lack of leadership in South Africa’s current government, according to survey feedback outlined in the index.

According to the survey, CEOs are also mostly “experiencing longer decision cycles and cautious investment decisions”.

Moreover, the CEOs do not see the weak cycle ending any time soon, as whenever one sector starts to pick up, another slows down.

Several CEOs also said that they did not see the economy improving until a new regime takes office.

With this in mind, the CEOs highlighted the need for leadership that provided employment opportunities, negotiated properly and inspired business owners to rebuild their business, according to the index.

Meanwhile, the basic materials sector recorded the largest increase in confidence of 59.3%, mainly driven by confidence in planned levels of investment being up 104.5%, and confidence in economic conditions rising by 94.3%. 

Showing almost flat confidence, the consumer goods sector increased by 5.8%, with sentiment mainly driven by a 10.9% increase in confidence relating to the ability to secure debt and equity capital, as well as a 6.8% increase in confidence in economic conditions. 

The financial sector recorded a decrease in confidence of 2.3% in the third quarter. This fall in confidence can be attributed to a 17.6% decrease in confidence relating to the ability to secure debt and equity capital, as well as an 8.1% decrease in company growth expectations.