Election‑Driven Volatility
When the 2024 national election heated up, the mood on the shop floor and in boardrooms turned sour. The South African Chamber of Commerce and Industry’s (SACCI) Business Confidence Index (BCI) slipped by 6.9 points between March and May, a drop that mirrored the political turbulence and the flood of speculative headlines about policy shifts. Companies, from mining outfits to tech start‑ups, put projects on hold, delayed hiring, and watched cash flow forecasts with a wary eye.
Analysts point to three main stressors during that window: uncertainty over the new administration’s fiscal stance, fears of tariff changes affecting export‑oriented firms, and a spike in electricity load‑shedding that threatened production continuity. The collective anxiety was palpable enough to push the BCI down to its lowest reading of the year, prompting the government to issue reassurance statements and a handful of emergency stimulus measures.
- Fiscal policy debates intensified, with opposition parties demanding higher taxes on corporations.
- Trade partners hinted at reviewing bilateral agreements, causing export‑dependent sectors to brace for potential barriers.
- Load‑shedding schedules grew longer, prompting manufacturers to invest in backup generators.
Signs of a Steady Recovery
By June, the shockwaves began to subside. The newly formed coalition signaled a commitment to fiscal prudence while also pledging to overhaul red‑tape that had long slowed down business licensing. As a result, the BCI clawed back 3.7 points in August, reaching 111.5, and settled at 110.2 in September. Over the first nine months of 2024, the index averaged 110.9, up from 109.2 in the same period last year – a 1.7‑point gain that signals cautious optimism.
Experts attribute this rebound to what they call “collaborative governance.” Ministries have begun co‑ordinating on infrastructure projects, especially around logistics corridors that have historically bottlenecked imports and exports. The treasury’s recent budget revision also trimmed some of the most contentious tax proposals, easing the immediate fiscal pressure on private firms.
While confidence is rising, the macro‑economic backdrop remains a tough nut to crack. South Africa’s GDP grew merely 0.4% year‑over‑year in the first half of 2024, far short of the 1% target set for the full year. To bridge that gap, economists say the country would need a series of robust quarterly expansions – a tall order given lingering power shortages and global trade headwinds.
Looking ahead, the trajectory of South African business confidence will hinge on three key developments: the stability of the new government’s policy agenda, the resolution of electricity supply issues, and the ability of firms to adapt to shifting international market conditions. The latest data from July 2025, showing the SACCI BCI at 116.7, suggests that the upside potential is still very much alive, even as other indices like the RMB/BER dip due to logistical setbacks.
In practice, many firms are already feeling the change. A Johannesburg‑based logistics company reported a 12% increase in new contracts after the government cleared backlog permits, while a Cape Town fintech startup cited the clearer regulatory tone as a catalyst for its latest funding round. Meanwhile, trade associations continue to lobby for a permanent solution to load‑shedding, arguing that reliable power is the single most critical factor for sustained confidence.
Overall, the post‑election period has turned a sharp decline into a gradual climb, suggesting that while South Africa’s economy still faces headwinds, the business community is beginning to see a clearer path forward.