While business confidence in Durban has improved, water issues, a poor sewerage system, the state of the city’s roads, erratic electricity supply and public safety continue to pose a headache for the business community.
This is reflected in the latest Durban Business Confidence Index (BCI) for the final quarter of 2024 — compiled by the macroeconomics research unit of the University of KwaZulu-Natal’s School of Accounting, Economics and Finance in association with the Durban Chamber of Commerce.
It comes as the eThekwini municipality on Monday dismissed social media claims it was bankrupt and unable to provide essential services.
Prof Harold Ngalawa and Dr Ntokozo Nzimande, who compiled the BCI report, said the index presents the sentiment of business people in conducting their day-to-day business in the greater eThekwini municipality.
According to the latest report, after two successive improvements, the Durban BCI dropped to 60.74 in the fourth quarter of 2024 from 63.01 in the previous quarter, representing a 3.6% deterioration in confidence in the city’s economy.
“Despite this drop, business confidence remains bullish, staying well above the 50-point mark, and reflecting a positive outlook on business conditions in Durban.
“On a year-on-year basis, business confidence substantially improved by 59%, implying business conditions significantly improved in 2024 compared to 2023.”
The BCI ranges from 0 to 100, where the extreme values of 0 and 100 represent a complete lack of confidence and full confidence, respectively. A BCI of 50 indicates the business situation is normal/neutral, less than 50 denotes a lack of confidence, and greater than 50 shows confidence in the Durban economy.
“The easing macroeconomic conditions coupled with government interventions to revitalise Durban continue to sustain business confidence in the city above the neutral or 50-point mark,” the academics said.
The report examined the business community's service delivery perceptions , which “improved significantly in the fourth quarter of 2024”.
“In the 2024 Q4 Survey of Business Opinion in Durban, 57.6% of businesses reported that if they (or anyone) complained about poor service delivery, it is unlikely the local municipality will deal with it within a reasonable time. This represents a significant improvement from 73.7% in the previous quarter.
“This may be partly explained by the factors that sustained the positive business confidence in Durban during 2024 Q3 and 2024 Q4.”
But businesses are still plagued by poor service delivery.
Among the services delivered by the authorities, management of the environment — sewerage, solid waste and parks — was the worst at 33.3% in the fourth quarter compared with 29.7% in the third quarter of 2024.
This was followed by water — 24.2% in 2024 Q4 compared with 27% in 2024 Q3; public safety — 15.2% compared with 21.6%; and roads — 15.2% compared with 13.5%.
Electricity remained a relatively minor concern, though the proportion of respondents who complained about electricity increased slightly from 8.2% in the third quarter to 12.1% in the fourth quarter.
“This may be explained by the sustained absence of load-shedding, which continues to buoy performance of the electricity sector that in turn has enhanced sentiment towards risk-taking by businesses,” the report stated.
On Monday the municipality assured residents and the business community the city “remains in good financial standing despite a constrained national fiscal environment and services continue to be rendered in line with the approved budget for the 2024/25 financial year”.
“The city has noted the widespread circulation of fake news through WhatsApp messages and other media platforms alleging that various departments in the municipality are unable to deliver services due to a 'bleak financial situation'.”
It is important that the public is not misled into believing that the municipality is bankrupt
— Musa Mbhele, eThekwini city manager
The departments mentioned in the messages include water and sanitation, parks, recreation and cemeteries, electricity and cleaning and solid waste.
City manager Musa Mbhele dismissed the “non-factual allegations”, describing them as part of a smear campaign aimed at tarnishing the municipality's image.
“It should be highlighted that the municipality is doing midterm performance review in terms of the Municipal Finance Management Act (MFMA) and it has been noted that some expenditure items are higher than normal due to various reasons, including adverse weather conditions which required more resources — for instance the heatwave affected a number of our electricity substations and the persistent heavy rain impacted our water infrastructure.
“The midterm review will inform the adjustment budget that is being finalised for the council meeting in February. The need for the adjustment budget is normal, taking into account our complex operations and is provided for in the MFMA. This was also done in the previous financial year,” said Mbhele.
He denied that plumbers were not being dispatched to attend to water leaks.
“The Water Network Branch responsible for this function continues to deploy internal and contracted plumbers to attend to burst pipes and leaks in order for the city to save water. Grass cutting services and maintenance of verges also continues in line with the annual grass cutting cycle.”
Mbhele said the city has significantly improved planning during its Integrated Development Process and has aligned its business processes to ensure improved accuracy and realistic budgets to reduce reliance on fund transfers and adjustments.
“It is therefore important that the public is not misled into believing that the municipality is bankrupt.”
The BCI report states that business sentiment has improved within the last year because of the interventions to revive the city and the relatively stable macroeconomic environment, he said.
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