South Africa business confidence retreats from 2-1/2 year high

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A street trader sells fruit from a shopping trolley at a taxi and bus rank in Pinetown, South Africa September 30, 2017. REUTERS/Rogan Ward

JOHANNESBURG (Reuters) – South African business confidence pulled back in February after hitting a 2-1/2 year high in January as exports, imports and retail sales fell, but prudent economic policies could help boost sentiment going forward, a survey showed on Wednesday.

The South African Chamber of Commerce and Industry’s (SACCI) monthly business confidence index (BCI) fell to 98.9 in February from 99.7 in January – which was its highest since late 2015.

“The relative large negative monthly effects came from lower merchandise trade export and import volumes, and real retail sales,” SACCI said in a statement.

Business confidence was dented by policy uncertainty under the leadership of Jacob Zuma but economists say President Cyril Ramaphosa’s election as leader of the ruling African National Congress in December, and as president last month, has raised expectations that the country will make economic reforms.

“The budget was a first step towards prudent and consistent economic policy to re-establishing long-term investor confidence,” SACCI said.

“However, pivotal to a sustainable and inclusive economic growth performance over the longer-term is a substantial increase in fixed investment by local and foreign investors.”

In its budget at the end of February, the Treasury raised value-added tax for the first time in 25 years, part of efforts to cut the deficit and stabilise debt. Economic growth forecasts for the next three years were also raised.

Reporting by Olivia Kumwenda-Mtambo; Editing by Joe Brock

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Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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