In the first quarter of 2026, the Business Confidence Index of the Bureau for Economic Research (BER), based at Stellenbosch University, rose to 47 points, from 44 points in the fourth quarter of 2025. That was the strongest reading since 2015. Firms benefited from lower fuel prices, lower interest rates, and stronger consumer demand, especially in vehicle sales, which supported dealerships.

But the improvement still left the index below the 50-point neutral level, meaning more firms remained dissatisfied than satisfied with prevailing business conditions in South Africa.

Bheki Mahlobo, in-house economist at The Common Sense, said, “The short-term movement around the 50-point line matters less than the longer-term relationship between confidence, fixed investment, and economic growth.”

According to Mahlobo, “Business confidence rose steadily from 1994 to 2007, holding near 80 points between 2004 and 2007. Over that period, fixed investment lifted by seven percentage points, from 15% to 22% of GDP. Economic growth then held at over 5% between 2004 and 2007.”

“After 2008, confidence slumped and has remained around or below 50 points for most of the period since. At current confidence levels, the market signal is consistent with a fixed investment rate of below 15% of GDP, which in turn is consistent with economic growth of around 1%.”

Mahlobo advises that the index report tomorrow “should therefore not be read merely as a temporary war shock driven by higher oil prices. It should be read as another test of whether South Africa’s much-vaunted reform process is strong enough to change the investment climate.”

So far, the answer to that question remains no. South Africa’s government has done much to talk up its reforms, the merits of its Project Vulindlela, and the like. To an extent, that has cast a climate of opinion in elite circles that the country’s government is gearing to stage a turnaround.

But the qualitative measure of that, the actual confidence number, remains very far below its peak of the early 2000s, meaning that, in practical terms, investors are not convinced.

What needs to shift to change that? Four things come up time and again.

The first is to rework black economic empowerment to stop taxing capital on arrival. The second is to recast the Expropriation Act to make explicit that the state cannot take property or investments without market-related compensation. The third is to fully outsource port and rail infrastructure. The fourth is to refit old coal-fired power stations and light them up.

With those four steps taken, South Africa’s confidence indicator will lift strongly, with the effect of driving the rate of fixed investment upwards, as a consequence of which the rate of economic growth will lift.