Austerity blamed for weak business confidence

Economists are expressing concern that business confidence in the country will remain low unless the government reverses its decision to cut spending in crucial sectors. The warning comes as the country anticipates the release of Statistics South Africa’s second-quarter GDP figures, which will provide insights into the performance of various economic sectors between April and June.

Dr Mzwanele Ntshwanti, an economist, suggests that the government should invest more in education, infrastructure, and healthcare to attract foreign investment. He asserts that the government's recent austerity measures, involving cuts to expenditure on education, healthcare, and infrastructure, send a negative signal to businesses.

Ntshwanti explains that such actions make it uncertain whether the government is committed to building infrastructure and ensuring essential services like water supply, which in turn discourages investment in sectors like railways, energy, and resource transportation. Dr Azar Jammine further adds that growth prospects appear to be slim.