South African business confidence rose for the first time in six months in July, boosted by exports.

The index increased to 94.7 from 93.7 in June, the South African Chamber of Commerce and Industry said in an emailed statement Wednesday. Confidence is still lower than a year ago.

Business confidence has slumped each month after reaching a record high in January, its longest losing streak since 2011, as industries await real reforms under the new administration of President Cyril Ramaphosa. While the downward trend has halted, a sustainable improvement in sentiment will depend on the removal of policy and political uncertainties, the chamber said.

The rand weakened after the ruling African National Congress said last week it will complete a process to change the constitution to allow land seizure without payment. The “without-payment” clause accentuates uncertainty over property rights and is a concern for investment, the International Monetary Fund said before the ANC’s announcement.

“The execution of policy and removal of structural economic constraints require a longer-term approach,” the business chamber said. “Addressing political uncertainty and the implementation of a suitable economic policy framework, however, should be a short-term priority.”

The rand weakened 0.6 percent to 13.4092 per dollar by 1:34 p.m. in Johannesburg on Wednesday.

The ruling party is seeking to retain its majority in elections next year. Land and general policy uncertainty will have a negative impact on sentiment ahead of the vote, Gina Schoeman, an economist at Citigroup Global Markets, said by phone.

“Political uncertainty is going to weigh down on that kind of data,” she said. “I don’t think this trend is going to continue to rise very strongly for the rest of the year.”

Merchandise export volumes, slower inflation and retail sales were the biggest positive contributors to confidence in the month, the chamber said.

Ntando Thukwana / Bloomberg

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