The South African Chamber of Commerce and Industry's (Sacci's) Business Confidence Index (BCI) remained steady at 114.7 in both February and March, indicating a stablisation of confidence at an improved level.

The index has been on an upward trend from November 2023 and reached its highest level since January 2018.

Ten out of the 14 BCI subindices either positively contributed to the BCI or remained unchanged month-on-month in March, while four subindices had a negative impact.

The notable short-term positive influences were observed in global trade and foreign tourist service-related activities.

Additionally, the BCI showed a medium-term improvement as it rose by 3.4 index points year-on-year in March.

"The enhanced BCI suggests a business environment that remains stable to positive, despite external factors and local economic challenges that may not be conducive to business operations. This positive shift in the Sacci BCI reflects businesses' adaptability to adverse circumstances, partly attributed to positive international economic and business relations involving South Africa.

"Despite South Africa’s foreign political relations, international economic and business engagements have significantly contributed to the country's economic wellbeing. These engagements play a vital role in supporting local business activities and influencing the overall business climate. Moreover, they not only bolster business confidence but also enhance investor confidence among foreign non-residents and local businesses alike," Sacci points out.

It adds that, critical to achieving economic growth is maintaining adequate levels of capital stock and encouraging continued fixed investment.

"However, domestic savings in South Africa fall short of financing the necessary fixed investment to expand the capital stock. In 2023, domestic savings only accounted for 14% of gross domestic product (GDP), leaving a considerable shortfall of 11% of GDP to achieve a 25% fixed investment to GDP ratio. This financing gap must be supplemented by foreign investment due to South Africa's inadequate domestic saving performance.

"As the upcoming election campaign unfolds, participants may espouse various objectives and goals. Nonetheless, prioritising actual performance and accountability that yield tangible shorter to medium-term results is crucial for fostering greater local and foreign investor confidence, sustainable economic growth and increased employment opportunities," Sacci says.