Microeconomics Researchers Plan for Boosting Durban’s Foreign Direct Investment

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The Macroeconomics Research Unit (MRU) in the School of Accounting, Economics and Finance (SAEF) has teamed up with the Durban Chamber of Commerce and Industry (DCCI) and eThekwini Municipality in a project where the Research Unit will produce the Durban Business Confidence Index (BCI) with initial funding from eThekwini Municipality overseen by DCCI.

‘This is a significant indicator of business conditions and the overall health of the City’s economy. The index will highlight local business confidence levels which can drive business growth and investment, encourage employment opportunities as well as attract talent and tourists to the region. The index will also empower organised business to make more informed decisions by monitoring growth and anticipating turning points in economic activity,’ explained Durban Chamber of Commerce and Industry’s Manager of Policy and Advocacy Mr Yolan Nagoor.

The project is building on eThekwini Municipality’s plan of seeking to boost new Foreign Direct Investment into the city over the next five years. An outline of the project was recently presented by MRU’s Research Fellow, Dr Edson Vengesai, at a session that was attended by representatives of the University, eThekwini Municipality, DCCI and Trade and Investment KwaZulu-Natal (TIKZN).

The Unit, which is headed by College of Law and Management’s Acting Dean of Research, Professor Harold Ngalawa, comprises of academics and postgraduate students whose mission is to advance and develop macroeconomics research, also held discussions with TIKZN on the prospects of expanding the project to cover the whole of UKZN.

‘We are proposing a Business Confidence Survey which involves a questionnaire being sent to businesses located in eThekwini municipality. It will contain economic questions aimed at assessing demand; situation on production; commodity prices and production prospects; export orders and quantities of production; employment plans; expectation on prices; and future capital investment plans,’ explained Ngalawa.

He further added that the data collected through the well-designed questionnaire is expected to provide information on future developments on the business conditions in the trade (retail), manufacturing, construction and financial sectors.

Vengasai said the Durban BCI will help policymakers to improve upon their forecasts of relevant variables and hence enhance policy implementation adding that the index describes the degree of sentiments towards risk taking by entrepreneurs.

‘The index outlines the current economic situation, future direction, output growth and expected turning points of economic activities. It is expected that the Business confidence index will help the municipality in forecasting future business growth and trends for the implementation of proper strategies and policies,’ said Vengasai.

MRU Director, Dr Adebayo Kutu explained that the business survey questionnaire contains economic questions on, amongst others, current and expected developments regarding sales, orders, employment, inventories, selling prices and constraints. 

‘The respondents will receive an exclusive, free copy of the summary of the results enabling them to know how fellow executives feel on the current quarter and their expectations for the next one, allowing them to compare their performance against the rest of the sector without having to directly ask competitors for such information,’ said Kutu.

Words and photographs: Thandiwe Jumo