South Africa’s business confidence deteriorated in February, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday, with its index falling to 93.4 from 95.1 in January, the lowest reading since September.
Confidence in the economy has been strangled by policy and political uncertainty. Investors are sceptical about President Cyril Ramaphosa’s ability to deliver reform ahead of national elections in May, while nationwide electricity blackouts have resumed.
“The upcoming elections do not only serve as an opportunity to establish credible representation, but also provide a platform to come to a rational and sustainable economic policy framework,” Sacci said in a statement.
On Tuesday, data showed the economy, Africa’s most industrialised, grew 0.8% in 2018, slower than the 1.4% seen a year earlier. Growth in the final quarter was 1.4%, driven by agriculture and manufacturing.
Analysts said the figures showed growth would remain tepid in 2019, with the Treasury’s modest forecast of a 1.5% expansion in gross domestic product in danger after recent power cuts by state utility Eskom.
Business confidence initially jumped after Ramaphosa replaced scandal-prone Jacob Zuma as president in February 2018, pledging to reverse a decade of policy mis-steps that hampered growth and investment.
But that euphoria has waned as investors fret about the slow pace of reforms promised by the billionaire businessman, who is also under pressure to maintain the ruling African National Congress’s (ANC) electoral majority at polls due in May.