Cape Town - While the DA and the Western Cape government are smiling about the latest RMB/BER Business Confidence Index (BCI) showing business confidence in the province is higher than in any other provinces, ActionSA says the confidence is not felt in townships and on the Cape Flats.
The BCI reported a 3-point uptick in confidence levels in the Western Cape, from 2023 (Q4) to 2024 (Q1), improving from 37 points to 40 out of a possible 100.
DA MEC for Finance and Economic Opportunities Mireille Wenge said that when the BCI was combined with the fact that four out of five (78.9%) of all net jobs created in the past five years were in the Western Cape, “we get a good indication that our economic action plan, (Growth for Jobs’ which seeks to enable private-sector-led growth to achieve a R1 trillion, jobs-rich, diverse, resilient, and thriving economy, growing at between 4% and 6% by 2035), is having an impact”.
“This is the third-consecutive increase in business confidence in the province and the longest sustained increase in Western Cape business confidence since Q2 of 2018. It is also notable that Western Cape business confidence far exceeds its provincial counterparts, Gauteng and KwaZulu-Natal, who are at 23 and 18 points, respectively, for the same period.
“Make no mistake, we have a lot more work to do. But this tells us that the policies, plans and actions taken by the Western Cape government to enable the private sector to do what it does best – grow and create jobs – are having a positive impact on businesses in the province,” said Wenger.
Matthew George, ActionSA Western Cape spokesperson, said the party welcomed the indication that business confidence was rising in the province.
“However, businesses on the periphery of the city, the outlying areas in these conversations, face myriad challenges, some of which make their daily operations impossible.”
George said that coupled with the reality that access to capital in those communities was largely inaccessible, businesses faced a double crisis.
“Firstly, they are immediate victims of criminal gangs who extort traders and small businesses, with payments ranging upwards of R500 a month to armed gangs, or risk being robbed or assaulted. Secondly, basic services, limited as they are, are often suspended in these communities because the same gangs threaten municipal services with violence.”
He said no business could thrive or operate in an environment where access to basic services was not guaranteed and criminality was rampant.
Therefore, ActionSA, recognising the critical role the informal sector played in stimulating economic upliftment in the most vulnerable communities, had outlined its pro-poor service delivery agenda.
“We have also outlined a plan boost and upskill the township economy by directing critical investment opportunities and forging partnerships with capital in our townships.”
David Ansara, a socio-economic analyst, said although the province was better governed and offered a more conducive business environment than other provinces, it remained constrained by national legislation that was hostile to free enterprise.
“While larger, more established businesses may be able to cope with the growing compliance burden, smaller businesses, particularly those in disadvantaged areas, often fail due to over-regulation in Pretoria.
“This is particularly the case with South Africa’s restrictive labour laws, which make it risky to hire new workers, leading to rising unemployment,” Ansara said.
“In addition, the monopoly exercised by the central government over ports, rail, and, to a lesser extent, energy is also a handbrake on growth in the Western Cape.
“To meaningfully address poverty, the Western Cape provincial government will need to aggressively push for more federal powers to fully realise the significant growth potential in the province.”