South Africa’s Economy Goes Into Recession As Nigeria Blooms

The economy of South Africa has gone into recession. This is the second time that the economy of South Africa is drifting into recession within a period of two years.

According to economic analysts, the economy of South Africa has been hit by numerous and prolonged blackouts that have hurt the manufacturing sector leading to a reduction in jobs and revenue.

South Africa’s economy contracted 1.4 percent in the fourth quarter of 2019, according to official statistics released on March 3, 2020. The analysts had only anticipated the decline in the economy by just 0.2 percent.

The 1.4 percent economic contraction was reported after another 0.8 percent contraction in the previous leading to a second recession which is; two-quarters of negative growth- since 2018.

The return into recession now piles pressure of President Cyril Ramaphosa who had pledged to revamp the economy by fighting corruption and enabling investments across all sectors.

Overall, the economy of South Africa grew only 0.2 percent in 2019, the lowest rate in 10 years and far much below the country’s annual rate of population increase.

South Africa has now been overtaken by Nigeria as the largest economy in Africa. South Africa is now at position two. Both South Africa and Nigeria account for almost half of sub-Saharan Africa’s gross domestic product.

Nigeria’s economy, despite the weakening of the Naira against the US Dollar, expanded in the fourth quarter beating the forecast. The GDP of Nigeria expanded to 476 billion US dollars.

According to Bloomberg, projections show Nigeria’s economy will continue to grow faster than South Africa’s. While the International Monetary Fund cut its forecast for Nigeria’s 2020 growth to 2 percent from 2.5 percent last month, due to lower oil prices, South Africa’s GDP is forecast to expand only 0.8 percent.

Economic analysts have now been left guessing on what the exact impact of the deadly Coronavirus will be on the general economy of Africa.

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