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The conversion of the political environment in South Africa was reflected in the business climate that initially wavered in May but started to recover in June and July 2024. SACCI’s Business Confidence Index (BCI), after dipping by 5.8 index points in April and a further 1.1 index points in May 2024, recovered by 1.2 index points in June and 0.1 index points in July to reach 109.1.

Between June and July 2024, business sentiment was positively influenced by the increased number of new vehicle sales and a stronger and less volatile weighted rand exchange rate. However, lower volumes of import merchandise and a reduced number of overseas tourists adversely affected business sentiment.

Over the year to July 2024, SACCI’s BCI increased by 1.8 index points, largely due to rising tourist numbers, increasing international precious metal prices, optimistic new vehicle sales, and a better-performing rand exchange rate. However, deteriorating import and export volumes and the disappointing real value of building plans passed weakened business sentiment.

The meagre year-on-year improvement of the SACCI BCI confirms the need for more progressive economic growth actions. In this regard, the president indicated that his new multi-party administration will prioritise economic growth by tackling structural reform, fixing poorly managed municipalities, cutting red tape, and ramping up infrastructure investment.

SACCI agrees that inadequate and slow economic growth in South Africa needs to improve. Such improvement should enhance more local and foreign fixed investment and thus a higher level of economic activity that can accommodate additional inclusiveness. An extrapolation of present short-term trends indicates that economic growth may not exceed 1.2% per year over the medium term if restraining structural and confidence issues are not urgently addressed.

The broader representation and accountability in government have created an opportunity for efficient economic expansion, more employment opportunities, and increased inclusiveness. There is now an opportunity to put the economy on an upward trajectory that fosters greater business and investor confidence. 

Both the public and private sectors must play a pivotal role in this progress and enhancement by fulfilling their respective roles.

Issued by SACCI