South Africa’s business confidence index fell to its lowest in 23 years in December after the sacking of the finance minister and instability in financial markets after the expected U.S. hike in interest rates, a survey showed on Thursday.
The Business Confidence Index (BCI) fell to 79.6 from 82.7 in November, it’s lowest level in 2015.
“The passive performance of the South African economy and its effects on the business mood was complicated by the changing of the guard at the Treasury when it was least desirable,” the South African Chamber of Commerce and Industry said in a statement.
“More negative outcomes from the credit rating agencies became reality when the expected hike in U.S. interest rates was announced with the predictable rational reaction from the financial markets and economic commentators.”
President Jacob Zuma sacked then finance minister Nhlanhla Nene on Dec. 10 in favour of a relatively unknown lawmaker, David van Rooyen, unnerving investors in an ailing economy whose investment grade status is already at risk.
The firing of Nene shook the local financial markets, with the banking index plummeting almost 20 percent as worries grew that pressure on South Africa’s sovereign credit ratings would hit profits and drive up bad debts among the nation’s banks.
The U.S. central bank’s policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.