South African Business Group Urges Reforms as Sentiment Recovers

(Bloomberg) -- A South African business group is urging the government to speed up structural reforms to bolster economic growth and create jobs as sentiment has partially recovered from restrictions to curb the spread of the coronavirus.

The South African Chamber of Commerce and Industry's business-confidence index dipped to 85.7 in September from 85.8 the previous month, it said. It released both August and September data on Wednesday.

The gauge plunged to 70.1 at the height of lockdown restrictions in May, the lowest level since its inception. The rules helped push the economy into its longest recession in 28 years.

“It is clear that the Covid-19 pandemic and the lockdown process managed by government had a paralyzing effect on the economy and the business climate,” Sacci said. “It has become apparent that the economy can be restored if a corrective phased process is implemented as a matter of urgency.”

Corrective action should include addressing the “unsustainable fiscal position” in all public sector institutions and high profile arrests for graft would help restore investor confidence, it said.

The government should also pursue enabling policies at a time when the Northern Hemisphere looks set to experience a second wave of coronavirus infections while South Africa appears to have passed the worst of a local outbreak, Sacci said.

Restrictions should be limited to areas and communities with high infection rates so as not to cause further damage to the economy, according to the group. South Africa started a gradual and phased re-opening of the economy on May 1 and moved to the lowest lockdown level toward the end of last month.

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