The South African Chamber of Commerce and Industry (Sacci) has reported that its Business Confidence Index (BCI) has improved significantly between September and November, from 121.1 to 132.3.

The November BCI was also 14.2 index points higher than in November 2024.

This follows the last notable large year-on-year increase of 17.1 index points in the BCI in June 2021 when Covid-19 restrictions were lifted.

Sacci says the latest increase in the BCI is, however, not a broad-based improvement in the business climate.

Apart from a notable increase in overseas tourists, it notes that the increase can be ascribed to specific BCI subindices that were affected more by global economic and financial market risk assessments than local real economic performance.

Sacci explained that the increase in the BCI to the high level of 125.8 in February was followed by a notable decline to 113.2 in June.

From July onward through August and September, the BCI recovered some lost ground and increased to the level of 132.3 in November.

For the year up to November, the BCI averaged 120.6 compared with the average of 111.9 for the first 11 months of 2024.

Between October and November (month-on-month) only one of the 14 BCI subindices, namely energy supply (electricity costs), negatively affected the business climate.

Seven subindices were in support of a positive business climate, and six subindices had a neutral effect.

Year-on-year to November, the Sacci BCI rose by a significant 14.2 index points.

The decrease in merchandise export volumes and the lower energy supply subindex – owing to increased electricity costs – were the only two subindices that had a negative yearly impact on the BCI.

Sacci says the occasion of hosting the G20 Summit provided an opportunity and platform for Africa to inform a global spectrum of participants about Africa’s unique circumstances.

Important issues such as available and affordable energy, exploration of critical minerals, attention to infrastructure projects and Africa’s exceptional public sector debt levels and debt servicing costs were noted.

Although the Medium-Term Budget Policy Statement does not include tax/revenue policy adjustments, Sacci says there were still concerns such as limited fixed capital expenditure, substantial social transfers, share of budget allocated to compensation of employees and high debt servicing costs.

Apart from increased overseas tourism that made a special contribution to lift business sentiment, Sacci says there are some important physical economic activities that are lagging behind and represent a slow-growing economy.

It argues that investor confidence and fixed investment are needed to promote longer-term sustainable economic growth.

The high BCI level may, however, inspire structural economic policy adjustments that would be more attractive to local and foreign investors in support of higher economic growth, employment and inclusion, it notes.