South African investors had put a halt to investing in new businesses in Africa’s most advanced economy, according to chief economist at Econometrix, Dr Azar Jammine.

Jammine, speaking at the Experian Business Debit Index (BDI), told the media the South African businesses have done this in a “big way”. He said industrial action was behind the lack of confidence in the country by the country’s business space.

The last straw that broke the Camel’s back was last year’s strike in the platinum sector which lasted almost five months, nearly crippling the companies operating in that sector. Some businesses are now taking the option of retrenching workers and using machines instead of growing the businesses and hiring more workers. “They are investing only as much as is needed to keep the show on the road. That is enabling them to carry on surviving in a difficult economic environment, but it’s not conducive to a big upswing in economic growth,” Moneyweb quoted Jammine as saying.

Jammine said businesses had started to amass cash, which allows them to endure tough trading conditions, preventing the SA economy from sagging fully. This news could vindicate the government which has always complained that South African business was not investing enough in the country, dragging the economy down and creating massive unemployment. This has led to mistrust that currently exists between the government and the private sector.