No amount of grandstanding and back-slapping about the BRICS summit can obscure a worrying fact of South African life: ordinary citizens have little confidence in the future.
This much is clear from recent economic indicators suggesting the public will need more than a few new BRICS members to feel confident about mortgage loans and vehicle finance.
The latest FNB /BER Consumer Confidence Index of is the second lowest since 1994, on a par with negative sentiment at the time of Russia’s invasion of Ukraine. The only time the highly-regarded index has been lower in democratic South Africa was at the outset of Covid-19 lockdown in 2020.
The quarterly index score, which five years ago was in positive territory (+26) at the time of Cyril Ramaphosa’s Presidential appointment, is now more than 50 points lower at -25.
In their quarterly commentary BER said the dismal 2023 second quarter index score is “indicative of tremendous concern among consumers about South Africa’s economic prospects and their household finances.”
Confidence levels are lowest among high-income households, the latest index shows, with affluent consumers concerned about both the future economic outlook and the prospect of their household finances worsening over the next year. “High-income confidence levels are now far lower compared to low- and middle-income confidence, and even below the extraordinarily depressed levels attained during the height of the COVID-19 pandemic,” BER says.
ABSA’s Homeowner Sentiment Index for the 2023 first quarter is similarly bleak, according to a report in the latest Sunday Times. The Bank’s interim financial results show loan impairments rose from R272-million for the first half of last year to R975m this year.
What these dismal figures show is how South African households are battling to withstand repeated economic shockwaves that include load shedding, inflation, civil instability, and political uncertainty. It all adds up to a reality far removed from BRICS leaders bathing in the flashlights of new and lofty promises.
We as the Cape Chamber believe there is no shortcut to consumer confidence. It has to be earned through deed rather than creed, and by getting the basics right.
The jury is still out on the potential benefits of six new member states at the BRICS table, but there’s no doubt that South Africa would be better off with even six new jobs if table-talk is all that’s on offer.
John Lawson
CEO of the Cape Chamber of Commerce & Industry
