29 October 2004
Foreign businesses operating in South Africa have given the thumbs up to the country’s economy – though there are still concerns about Zimbabwe and HIV/Aids.
A survey conducted by the Bilateral Chamber Consultative Committee (BCCC), involving 252 of its member companies, found a sharp increase in business confidence compared to 2002, with the majority of respondents very positive about the country’s economy and future prospects.
The BCCC is an informal grouping of business chambers representing about 3 000 foreign companies, with a total membership investment in South Africa of more than R360-billion.
According to the BCCC, British business in the country represents about R280-billion worth of investment, German business about R22-billion, the Netherlands R11-billion, and France and Italy about R3-billion and R1-billion respectively.
In the survey, conducted from May to June 2004, 78% of respondents found the economy to be “satisfactory to excellent”, compared with 31% in a similar survey conducted in 2002. 95% expected the economy to remain the same or improve, Business Day reports.
Levels of confidence in the government have strengthened considerably, with 53% of survey respondents expressing increased confidence, compared with only 32% in 2002. 60% of respondents expect investment to increase, and 47% said they had created new jobs.
Relative confidence was expressed in the future of a market-driven economy (70% confident or better); balanced taxation (53%); democracy (46%); political leadership (34%); and equal opportunities for foreign business (32%), Business Day reports.
Positive economic features in South Africa include a competitive marketplace, reasonable return on investment, and cheap electricity.
According to Business Day, while 14% of respondents indicated a wish to disinvest, this was not due to dissatisfaction with the economy, but was seen as a natural process resulting from globalisation.
While respondents accepted black economic empowerment, some were concerned that current empowerment measures would not achieve the desired outcome.
Sticking points for foreign businesses include Zimbabwe – which is a key trading issue for many companies – and HIV/Aids. 79% of respondents rated the government’s HIV/Aids policy as “bad to very bad”, while 59% said developments in Zimbabwe had negatively affected their businesses.
Other problems raised include corruption, the competence of the civil service, inflexible labour regulations, and crime and violence.
Business Day reports that there was also strong pessimism about the accountability of trade unions, labour productivity, investment incentives, and the free transfer of funds out of South Africa. Respondents also noted that the rand’s volatility was a cause for concern.
Members of the Bilateral Chamber Consultative Committee are:
- Africa-Asia Society
- American Chamber
- Angolan Chamber
- Australian Business Association
- Austrian Business Circle
- Belgian Chamber
- British Chamber in SA
- Canada/South Africa Chamber of Business
- Danish Business Club
- Finnish/South Africa Trade Guild
- French/South Africa Chamber
- German/South Africa Chamber
- Hellenic Chamber
- Indian chamber of Industries
- SA-Ireland Business Association
- Israel/SA Chamber
- Italian/SA Chamber
- Japanese Chamber
- Korean Company Association
- Netherlands/SA Chamber
- Polish Chamber
- Sri Lankan Chamber
- Swedish Business Association
- Swiss Chamber