COVID-19 Plunges South Africa’s Business Confidence in Q2 2020
A recent report has shown that South Africa’s business confidence hit a record low in the second quarter of the year, according to a survey conducted by the Rand Merchant Bank (RMB) but compiled by the Bureau for Economic Research.
The report of the survey revealed that business confidence dropped from 18 points recorded in the first quarter to 5 percent in the second quarter, its lowest since 1975.
South Africa, Africa’s most industrialised economy, plunged into an economic recession in the final quarter of 2019 before the COVID-19 broke out in the embattled nation.
The situation of things in the second-largest economy in Africa was further compounded by COVID-19 lockdown, disruption of logistics and weak fiscal buffer necessary to cushion the effect of COVID-19 on the nation’s economy.
Ettienne le Roux, the Chief Economist at RMB, said “COVID-19 has drastically changed the already-weak economic landscape and perhaps, in some cases, permanently.”
“We are likely only beginning to fully appreciate the complexity of the economic impacts of this pandemic.”
Cyril Ramaphosa led government in a shocking move, perhaps a testament to the size of the COVID-19 impact on the economy, approached the International Monetary Fund (IMF) for $4.2 billion financial support for the first since the apartheid.
Getting out of the apartheid regime, South Africa vowed never to seek financial support from the multilateral institution because of its style of imposing or forcing borrowing nations to embrace policies that several indebted nations have blamed for their economic woes.