South Africa business chief lauds Rwanda-DR Congo accord

Cape Town- South Africa (PANA) -- A South African business executive has described the recent peace agreement signed by Rwanda and the Democratic Republic of Congo (DRC) as a positive development for the future of the African Union (AU) launched in Durban, South Africa in July.
Speaking Tuesday, the chief executive of the South African Chamber of Business Confidence Index (SACOB) Kevin Wakeford Said that the AU was a turning point for the continent.
In an address at the release of South Africa's business confidence index, Wakeford said that if well-managed, the foundations of the AU and the New Partnership for Africa's Development (NEPAD) could enhance economic growth prospects throughout Africa.
However, he warned that the spectre of possible famine facing millions in Southern Africa, due to widespread food shortages and the recent sharp increase in food prices in South Africa and elsewhere in the region, posed a major challenge to the AU.
Turning to the South African business situation Wakeford said that after improving since April 2002, the confidence index dropped from 108.
1 in June to 106.
5 in July - a dip of 1.
6 index points.
The month's decline was mainly caused by financial market sub-indices slowing down the index, while the sub-indices of real economic activity were either slightly negative or remained relatively neutral.
Wakeford said that the struggling US economy has led to nervousness in the US share market during July, impacting negatively on the rest of the world's share markets, including the Johannesburg Securities Exchange.
He also believed that a lack of trust was developing in certain business practices and that the more unpredictable international environment, coupled with a substantial drop in the price of gold and gold shares affected the South African economy.
In this vein, Wakeford felt that perhaps there might be a measure of world-wide introspection concerning the way business is conducted in free market economies and that South Africa was also undergoing such a re-evaluation.
He then referred to the recent rand commission as one such Events that assessed the functioning of the local forex market.
The SACOB executive expressed the hope that the findings gathered by the commission would guide the manner in which constructive business should be conducted in South Africa.
Referring to the business cycle as tenuous to any free market economy, Wakeford commented that perhaps the world economy has approached, and the South African economy was approaching the upper turning point of the current cycle.
If this is the case, South Africa's current growth levels of 2.
1% could be worrisome should there be a downturn in the business cycle.
He however concurred that in some respects the South African economy was still seen as fairly resilient and he expressed optimism that inflation was beginning to dissipate and perhaps has reached its peak in the domestic environment.
Wakeford felt that the economic outlook for the rest of the year and beyond might stay positive if the rand maintained its current stability coupled with no further interest rate hikes.
He reiterated the fact that price stability was inseparable from currency stability as was reflected in the sharp increase in prices during the first half of 2002, mostly caused by the sharp depreciation in the value of the rand in 2001.

07 august 2002 11:27:00

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