Fragile economy

2018-09-06 15:13

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

President Cyril Ramaphosa must have felt like King Canute this week as on the one hand he was securing a $60 billion aid and loan package from China to steady South Africa, while on the other the tide of recession rose without check to wreak havoc on all the country’s economic indicators.

Under these conditions South Africa will struggle to register any growth for 2018, and Ramaphosa’s dream of boosting growth to three percent this fiscal year has now turned into a nightmare, not only economically but politically.

The rot of the Zuma years runs to the core of every aspect of the state, and those who imagined that Ramaphosa, faced with a volatile and hostile global climate and the legacy of theft and economic sabotage, would be able to chart a new course immediately must be finding themselves sorely disheartened.

If they look closely at the elements which caused the damage to the GDP figures, they will be even more disheartened.

Real gross domestic product decreased by 0,7% in the second quarter of the year, on top of a contraction of 2,2% in the first quarter, resulting in the first technical recession since the 2008/2009 global financial crisis.

The largest negative contributors to GDP growth were the agriculture industry, which decreased by 29,2%, largely brought on by the drought’s impact on the horticulture industry, followed by transport (-4,9%) and trade (-1,9%).

Agriculture, in spite of all the hot air about its economic growth and employment prospects, and how land reform will turbo-boost it, makes a minuscule contribution to GDP at the best of times. That the economy is so fragile that so small a factor can throw it so badly off its stride is of serious concern.

Finance Minister Nhlanhla Nene has promised that a plan to stimulate growth, including some structural reforms, will be presented to Parliament by the end of next month.

It had better be more than warmed over electioneering.

Read more on:    pietermaritzburg

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.