The Rand Merchant Bank (RMB) Business Confidence Index compiled by the Bureau for Economic Research shows that its index has collapsed by eleven points.
Dr Azar Jammine, chief economist at econometrix says it is not surprising that business leaders have lost confidence in South Africa.
That is the most damaging impact that we've had so far from the Cabinet reshuffle and the credit rating downgrade that have emerged.— Dr Azar Jammine, Head economist at Econometrix
The psychological damage to business and consumer confidence has been compromised and that will contribute to lower economic growth just at the time we were hoping things will improve a bit.— Dr Azar Jammine, Head economist at Econometrix
Finance Minister Malusi Gigaba met with business leaders on Tuesday to address claims that they’ve lost trust in government.
Dr Jammine says Gigaba has finally realised that the previous finance minister, Pravin Gordhan, was doing a brilliant job in restoring the trust but it was all destroyed overnight by the Cabinet reshuffle.
He says it is a bit difficult to judge the integrity of Malusi Gigaba when he is compared to Pravin Gordhan.
It is difficult because one has to differentiate between the past and look into the future. Since he took over as minister he has received a wake up call from the attitude of investors in business.— Dr Azar Jammine, Head economist at Econometrix
Dr Jammine says Gigaba has spoken about maintaining the fiscal discipline which was Gordhan's hallmark but it raises question of why he was put in that position instead of Pravin Gordhan.
To hear more of this interview with economist Dr Azar Jammine, listen below: