South African business confidence has dipped to its lowest level since apartheid-era 1985.
This is according to a report by the South African Chamber of Commerce and Industry (SACCI) released on Wednesday.
SACCI’s sentiment index, which measures business confidence, declined to 89.1 in August from 92 in July.
This is the lowest since April 1985 when massive disinvestment from South Africa began, the report said.
SACCI cited policy uncertainty and the recent signing of the credit amendment bill that forces banks to write off certain loans as some of the reasons.
Other factors are concerns over prescribed assets for pension funds, the national health insurance bill, and slow pace of land reform.
Weak economic growth
Despite a 3.1% rebound in the second quarter, the economy is still expected to grow at less than 1% in 2019.
South African Reserve Bank governor Lesetja Kganyago recently put forward an estimate of just 0.6%.
Unemployment levels have climbed to 29% in the second quarter of 2019, while state-owned enterprises such as Eskom require huge government bailouts to stay afloat.
Draft recovery strategy
President Cyril Ramaphosa’s administration is under increasing pressure to turn the economy around.
Finance Minister Tito Mboweni published a draft economic recovery strategy document in late August and invited public comment.
The plan aims at creating 1 million jobs and rebooting the economy to achieve growth rates of 2-3% in the immediate future.
It proposes measures such as implementing a flexible industrial policy, promoting export competition, and pursuing labour-intensive growth.