Mboweni likely to drive up con­fi­dence

Business Day - - FRONT PAGE - Su­nita Menon Eco­nomics Writer menons@busi­nesslive.co.za

Busi­ness con­fi­dence has re­bounded from its low­est level in more than a year and could surge after newly ap­pointed fi­nance min­is­ter Tito Mboweni de­liv­ers the medium-term bud­get pol­icy state­ment in Oc­to­ber.

Busi­ness con­fi­dence has re­bounded from its low­est level in more than a year and could surge after newly ap­pointed fi­nance min­is­ter Tito Mboweni de­liv­ers the medium-term bud­get pol­icy state­ment in Oc­to­ber.

Along­side the in­vest­ment sum­mit in the same week, the medium-term bud­get is ex­pected to pro­vide greater cer­tainty, ac­cord­ing to the SA Cham­ber of Com­merce and In­dus­try (Sacci).

The busi­ness con­fi­dence in­dex, which as­sesses the busi­ness cli­mate, rose by 2.8 points to 93.3 in Septem­ber 2018, from 90.5 in Au­gust. This was from a base level of 100. Ev­ery five years, the in­dex is set to 100 and it in­creases or de­creases from that point. The in­dex was last re­set in 2015.

The in­dex was com­piled at the end of Septem­ber and does not re­flect the events of the past few days, in­clud­ing the res­ig­na­tion of Nh­lanhla Nene as fi­nance min­is­ter. The sur­vey did, how­ever, take into ac­count the eco­nomic stim­u­lus plan an­nounced at the end of Septem­ber to reignite the econ­omy.

Nene was re­placed by Tito Mboweni, whose ap­point­ment was well re­ceived in po­lit­i­cal and busi­ness sec­tors. The rand firmed 41c from an in­tra­day low of R15.06 to the dol­lar on the day of the ap­point­ment.

Econ­o­mists say a “cred­i­ble” min­is­ter at the helm of the Trea­sury bodes well for busi­ness and in­vestor con­fi­dence.

“Mboweni was an in­spired choice to re­place Nene and the de­ci­sive­ness of the move amid mar­ket un­cer­tainty was widely wel­comed,” said NKC an­a­lyst Gary van Staden.

Mboweni’s ap­point­ment was a con­fi­dence-build­ing and re­as­sur­ing step for the econ­omy, said North West Uni­ver­sity econ­o­mist Ray­mond Par­sons.

SA’s fi­nances are in a per­ilous state and Mboweni would have to con­vince the coun­try and mar­kets that the Trea­sury is on top of the chal­lenge, said Absa head of macroe­co­nomic re­search Peter Wor­thing­ton.

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