South African currency Falls As the Country Slips Into First Recession Since 2009

This is the first time since 2009 that the South African economy, the second largest in Africa after Nigeria, will be going into recession. The latest economic data by the country’s statistics agency showed the second-quarter gross domestic product (GDP) declined by about -0.7 percent, driven by the poor performance in key sectors, including agriculture, transport, and retail businesses. The country’s statistics agency said productivity from the agricultural sector plunged 29.2 percent in the second quarter, while the transport, communication and storage sector also dropped 4.9 percent. Mining sector recorded a growth of 4.9 percent and finance by 1.9 percent.

This puts a negative shadow on the country’s new president, a bad beginning for Ramaphosa’s, Jacob Zuma successor. Ramaphosa’s rise to power since December initially boosted sentiment and the rand following Zuma’s tenure of almost nine years. That optimism faded as economic reforms weren’t implemented fast enough and global trade wars and turmoil in other emerging markets soured sentiment, Bloomberg reports.

It’s showing that this economy remains in the doldrums, that we are in desperate need for policy certainty and structural reform to get us onto a growth path. This type of environment is difficult for job creation. We’ll get stuck in our low-growth term if we can’t get out of this, Elize Kruger, an economist at Paarl, South Africa-based NKC African Economics, said to Bloomberg.

The rand weakened 2.9 percent to 15.2973 per dollar in Johannesburg.

Adedayo Laketu

Adedayo Laketu is a creative inventor who's interested in curating a New Age for Africa across all mediums.

Leave a Comment

Your email address will not be published.

Previous Story

Davido Appears On American Radio Show Breakfast Club

Next Story

Women Now Make Up 68% Of The Parliament In Rwanda

Latest from Uncategorized