Africa-Press – South-Africa. Geopolitical tensions have led to a slight decline in South Africa’s business confidence, as the war in the Middle East continues.
This serves as an indicator of the South African economy’s vulnerability to external shocks, with even unexpected sectors like tourism set to be affected.
The South African Chamber of Commerce and Industry (SACCI)’s latest Business Confidence Index (BCI) dropped to 131.3 in March 2026, down 3.3 index points from February.
This is the lowest point the index has reached since October 2025, when it sat at 123.8. However, it is still 7.8 index points higher than the same period last year.
SACCI CEO Alan Mukoki told Newzroom Afrika that this decline shows South Africa’s susceptibility to global risks, which are currently manifesting as the Iran war and the subsequent oil crisis.
“The war in the Middle East has a direct impact on us because the price of oil is one of the biggest contributing factors in any balance sheet,” Mukoki said.
“Then you’ve got the piece around logistics. The idea around the chaos in the Strait of Hormuz, as well as the disruption of other value chains, becomes a very significant factor.”
Mukoki said global uncertainty levels had reached their highest point since Covid-19, when the BCI hit a record low of just 81.0 during May 2020.
SACCI listed a weakening rand exchange rate and decreases in foreign imports, resulting from the war’s impact on global trade, as key factors behind the decline in sentiment.
Other issues affecting business confidence included concerns about energy supply and costs, and difficult trade conditions resulting from the US tariff policy announced in early 2025.
However, Mukoki said the general sentiment remained relatively positive and that a quicker end to the conflict would likely boost short-term business confidence in South Africa.
“We think that this war will be resolved purely because we know that everyone is losing,” Mukoki said. “It’s having a very direct impact on the economy of the United States.”
“The stock market is down, oil prices and gas prices are up. The level of uncertainty will put pressure on the US administration to take the idea of a ceasefire seriously.”
One sector keeping business confidence high
Minister of Tourism Patricia De Lille
Despite the BCI’s slight decrease in March, business confidence in the country remained significantly higher than it was for much of 2025.
The BCI averaged 132.4 in the first quarter of 2026, up from 123.1 in the first quarter of 2025, with the country’s tourism sector cited as a driving factor behind the higher sentiment.
South Africa attracted a record 10.5 million tourists last year, with the Department of Tourism (DoT) aiming to increase this to 11 million visitors in 2026.
In the run-up to the 2026 Africa Travel Indaba trade show, Tourism Minister Patricia de Lille emphasised the economic potential of the sector during a webinar on 22 April.
“It is one of the few industries in our country that delivers immediately inclusive geographical spread across accommodation, transport, SMMEs, culture and community enterprises,” De Lille said.
South Africa’s tourism sector directly employed nearly 1 million people in 2024, with the DoT hoping to increase this by another 1 million jobs before 2030.
The impact of the oil crisis on jet fuel prices, however, is likely to have a prolonged effect on this industry even after a potential end to the conflict.
While SACCI listed inbound overseas tourism as a driver of higher business confidence over the last year, the March 2026 report indicates a possible month-on-month decrease in this area.
As many of South Africa’s international visitors arrive via Middle East cities such as Dubai and Doha, the war could negatively affect visitor numbers to the country in the short-term.
Business Leadership South Africa CEO Busi Mavuso said the country should position itself as a prime destination to capitalise on disrupted travel and business tourism to the Middle East.
De Lille said this was a stance that the DoT would take, aiming to attract travellers who have been forced to reroute their travel plans away from the Middle East over safety concerns.
“Since we don’t know when there will be an end to this war, from South Africa’s side we have been proactive,” De Lille said.
“We have reached out to the market to pitch to them that South Africa is a safe destination to visit. If you cancel your visit to the Middle East, South Africa is there.”
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