State-Owned Entities Blamed For South Africa’s Declining Business Confidence

By  |  August 7, 2019

A new survey by South Africa’s Chamber of Commerce and Industry (Sacci) has shown that business confidence in the country declined in July.

The report which was released on Wednesday indicates that BCI fell by 1.3 from to 92.0 from 93.3 in June.

This is the index’s second-lowest level since January 2019 according to Sacci. The lowest of 2019 was 91.8 recorded in March while the highest level was 95.1 recorded in January.

“The high level of optimism that existed immediately after the election of President Ramaphosa, is being affected by indications that the ruling party is divided on policy, political and factional lines, on the basis that these divisions have a direct impact on government’s efficiency and effectiveness in implementing its policies and managing the fiscus,” SACCI said in a statement.

It further highlighted that the poor state of State-owned enterprises (SOEs) and municipalities continue to be a huge cause for concern.

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The past few months have seen top officials of different state-owned entities quit raising concerns of the leadership and management style used in these government entities. Post Office chief executive officer Mark Barnes was the latest CEO to quit on August 1st.
Phakamani Hadebe also left power utility Eskom and ex-Vodacom executive Vuyani Jarana resigned from South African Airways in June.

“Government’s own current practice of how leadership and management is appointed to run its businesses and municipalities is where all problems start,” says Sacci.

SACCI further called on the government to revisit its policies, “As mentioned in Sacci’s previous comments, it is no longer negotiable that government urgently restructures its policies and procedures on how SOEs are managed, particularly through the independent appointment of competent boards and management.”

The survey also showed that import and export volumes, manufacturing and new vehicle sales fell in the month of July.

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