South Africa Business Confidence Rises

Business confidence in South Africa recovered in October after slumping to its lowest in three decades in the previous month, boosted by a jump in export volumes and a firmer currency, a survey showed on Wednesday.

The South African Chamber of Commerce and Industry’s monthly business index rose to 93.0 in October, its highest reading in three months, from 90.3 in September, Reuters reported.

“Positive monthly contributions mainly came from merchandise export volumes, the rand exchange rate, merchandise import volumes and real retail trade,” SACCI said.

Having slipped to one-month lows in mid-October after the state prosecutor said Finance Minister Pravin Gordhan would face fraud charges, the rand has since recovered after the charges were dropped, firming more than 9% against the dollar according to Thomson Reuters data.

The business body however warned that the recovery was “against the odds of slow domestic and global economic performance and local socio-political distractions”, and that the business mood would suffer if the country was downgraded.

“An investment downgrade to junk status could make the process of economic recovery more cumbersome and costly,” SACCI said.

 Economic Crisis

South Africa is trapped in an economic crisis‚ which is a far cry from the period between 1999 and 2006‚ former president Thabo Mbeki said late Tuesday.

Speaking at the 2016 Sunday Times Top 100 Companies Awards‚ Mbeki said that although South Africa was immersed in a crisis‚ “fortunately we have not reached a tipping point.”

He said this was an eventuality the country must avert at all cost. “We must act now and do the right thing because time is not on our side.”

Mbeki said‚ over the years‚ some negative features have emerged in the governing party which the organization had recognized. These included the use of political power for personal enrichment.

He said a deeply disturbing result was the gradual loss of respect for and erosion of the authority of the state. “This cannot but lead to social disorder and instability. It is a matter of common cause that our economy is experiencing great difficulty.”

“However‚ the hard reality we face today is that our country is trapped in an economic crisis which has turned the age of hope into the age of despair‚” Mbeki said.

He said the country was experiencing slow economic growth and levels of unemployment remained high.