The Southernmost country in Africa under the administration of Cyril Ramaphosa slipped into recession towards the close of 2019. This, however, is the second recorded recession since Ramaphosa assumed office two years ago and the third recession that has hit the country since 1994 when apartheid ended.
In the whole of Africa, South Africa is known to be the country with the most industrialized economy and also one of Africa’s powerhouse. This recession as expected is taking a toll on its economy as the country suffers an increased rate of unemployment, increase debt, low wages and income and crawling growth.
Ramaphosa who promised to resuscitate the country’s economic activity is moving like a slug to make this happen as the recession slows him down. According to the country’s statistics bureau, the country’s GDP fell by 1.4% in the fourth quarter and also in the past 3 months it reduced by 0.8%.
The country hit its lowest reading since the terrible global financial crisis 9 years ago. South Africa recorded growth of just 0.2%. The economic forecast shows that Ramaphosa can’t hide his administration from the blow of recession as the economy only grew by 0.9% this year.
Low Agriculture output and transport are the major reasons the economy’s growth dragged like a slug in the last quarter. Coupled with construction, mining, and manufacturing which exceeded helpful contributions from finance and government spending.
Of the 10 economic sectors in South Africa, 7 of them decreased in size in the fourth quarter according to Statistics South Africa. Although finance, mining and personal services tried, it wasn’t enough to row the country’s drowning boat out the water of recession.
Electricity blackouts have also cost the country a great fortune about hundreds of millions of dollars in lost output. As gathered, Eskom a South African electricity public utility is suffering for the alleged corruption under President Jacob Zuma the former president of South Africa. The Coal-fired power stations that are not properly structured and designed and also cash shortages are taking a toll on Eskom.
As gathered, the government have severally come to the rescue of Eskom and South African Airways.
‘’Freeing the economy from the dead-weight of a failing state will provide South Africa’s struggling economy with the antidote needed to arrest the terminal decline and put the country on a sustainable path of growth’’.
A lawmaker in South Africa Geordin Hill-Lewis stated. It was forecasted by the International Monetary Fund in 2019 that the economic growth in South Africa will continue to drag for a sixth consecutive year in 2020 and also it encouraged the country to make reforms that would boost private investment in the country.