2 minutes’ read
- South Africa’s second recession in two years and severe power blackouts are pointed out as the major causes for South African economy’s downfall.
- According to official statistics released by Stats SA, gross domestic product (GDP) contracted by 1.4 per cent in the fourth quarter of 2019
A report by Bloomberg has shown that Nigeria has surpassed South Africa as the continent’s largest economy. South Africa’s second recession in two years and severe power blackouts are pointed out as the major causes for the South African economy’s downfall.
According to official statistics released by Stats SA, gross domestic product (GDP) contracted by 1.4 per cent in the fourth quarter of 2019 against the forecast of a 0.2 per cent decline. The third quarter had already recorded a decline of 0.8 per cent against the same period last year. Seven out of 10 industries in South Africa shrunk in the fourth quarter. The transport and the communications sector shrunk by 7.2 per cent. The largest sector to record a fall was construction, which has declined for six consecutive quarters. The manufacturing industry fell by 1.8 per cent while agriculture dipped by 7.6 per cent, owing to adverse climatic conditions. Only finance, mining and personal services recorded slight improvement.
With higher oil output and the steps to boost credit growth by the central bank, Nigeria’s economic growth beat forecasts in the fourth quarter of 2019. According to the report, Nigeria’s economy is projected to grow faster than South Africa’s. While the International Monetary Fund cut its forecast for Nigeria’s 2020 growth to two per cent, from 2.5 per cent last month, due to lower oil prices, South Africa’s GDP is expected to grow by only 0.8 per cent. The ruling All Progressives Congress (APC) attributed Nigeria’s new economic status, to the policies of President Muhammadu Buhari-led administration to revive growth. The Nigerian economy exited recession in 2017. The Party claimed that the country’s economic growth is the outcome of deliberate practices and policies of the Buhari administration. Better transparency in governance, diversification of the economy away from oil, better fiscal management and a healthy protectionist approach were pointed out as factors that aided the growth
