With just over 100 days since the members of the Government of National Unity were sworn into office, President Cyril Ramaphosa says the county has witnessed a marked increase in confidence in the direction of the country.
In his weekly newsletter, the President noted that South Africans across various sectors were increasingly supporting government’s efforts, which is reflected in recent opinion polls.
One of the polls conducted by Ipsos revealed that the proportion of participants who believe the country is on the right track has doubled since the last surveys were conducted in April and June this year.
“There is also rising confidence in our country’s economic growth prospects by business and local and international investors. This was evident in the engagements I recently had with business leaders in Beijing and New York, and that Deputy President Paul Mashatile had with business leaders in London,” the President said.
In September, the Bureau of Economic Research and Rand Merchant Bank published its first Business Confidence Index since the formation of the new administration. It pointed to “cautious optimism” about improving business conditions in key economic sectors. It said improved electricity supply and political certainty following the elections had likely contributed to this improved business confidence.
“Sentiment is more than a ‘warm and fuzzy’ feeling. It is made possible by real developments in the economy and the country. Business confidence goes beyond discussion in boardrooms and conference halls.
“It is about the interest that is shown in our economy by all investors, both local and offshore. Sentiment has a direct impact on people’s lives as it can manifest itself in increased investments that can result in job creation,” the President said.
President Ramaphosa stressed that this rising confidence would have a tangible impact on the country’s fiscal health.
“Improved investment sentiment will benefit our country’s fiscus. A stronger economic outlook will improve South Africa’s credit rating, which in turn will facilitate greater access to global capital markets and lower our borrowing costs.
“When we spend less money on debt servicing costs, government has more space to increase its expenditure on building public infrastructure and providing education, healthcare, basic services and social support,” the President said.
President Ramaphosa noted that improved sentiment had strengthened the currency, lowering the cost of imports like oil, which in turn reduces fuel prices and the overall cost of living for South Africans.
“Increased business confidence attracts higher levels of private investment in the economy. When investors are more optimistic about their business prospects, they are more likely to invest more capital and expand their existing operations. Improved confidence also encourages the start-up of new businesses.
“More business activity creates more jobs and opportunities for our people. As businesses grow, they need to hire more employees and are able to increase wages,” the President said.
President Ramaphosa explained that when people feel secure in their jobs and income, they spend more, boosting economic activity and increasing government revenue.
He attributed the improved sentiment to the successful transition to the new administration, which enjoyed broad support and ongoing reforms that were addressing key economic and social challenges.
Another key development has been the country’s successful efforts to resolve the energy crisis.
“The country has had more than 200 days without load shedding. This has made a considerable difference to the lives of citizens and the operations of businesses. This work has also unlocked unprecedented levels of investment in the energy sector,” President Ramaphosa said.
Reforms in the logistics sector were also gaining momentum, with improvements in the operational performance of the nation’s port and rail networks. These advances are expected to boost not only economic activity but also the everyday lives of South Africans.
While President Ramaphosa acknowledged that economic growth has yet to accelerate, he expressed optimism that the government was laying a solid foundation for long-term progress.
“It is still early days for the Government of National Unity. The growth of our economy is still to pick up pace. However, a firm foundation is being laid, our growth prospects are being revised upwards and we are heading in the right direction,” the President said.
The President concluded by emphasising the importance of maintaining this momentum.
“It is clear that the improved confidence of the South African people and the positive sentiment among investors are well-founded.
“Our task now is to work together to further encourage hope and optimism by making a real and substantial difference in the lives of all South Africans," he said. – SAnews.gov.za
