The South African Chamber of Commerce and Industry (SACCI) said on Wednesday that Business Confidence Index (BCI) increased from 92 in December to 94.1 in January as the country opened business activity following the COVID-19 infection.
The SACCI said even though there were no active economic incidents in January 2022, the business sentiments increased by 2.1 index points because of strong support for the business environment.
“This improvement reflects stronger support for the business climate. Increased merchandise import, export, and retail trade volumes drove the higher BCI,” said SACCI CEO Alan Mukoki.
“Rising inflation and higher debt servicing costs due to rising interest rates had minor negative effects,” he added.
Mukoki said the increase in merchandise export volumes, new vehicles sold and higher share prices on the Johannesburg Stock Exchange contributed to positive sentiments which showed business and society’s tenacity and resilience.
“Despite non-economic incidents having a negative impact on the economy (particularly in the second half of 2021), business resilience and tenacity kept the economy from being distracted into uncertainty and dismay,” he said.
Mukoki said despite the fact that the business climate is not ideal, particularly for attracting much-needed fixed investment, society is determined to work toward a more stable social environment and a growing economy.
He pointed out that higher inflation, the lower real value of approved building plans, and lower international precious metal prices than in January last year negatively affected the confidence sentiment.
Finance Minister Enoch Godongwana will present the budget speech in Parliament later this month. Mukoki said Godongwana is expected to address corruption in the state-owned enterprises, debt levels, and how to revive investor confidence.