South Africa registers a marginal increase in economic growth

(3 minutes read)

• Simmer of hope permeates in the South African economy as the last quarter registers a better growth rates compared to previous ones

South Africa’s economy expanded in the final quarter of last year driven by a recovery in agriculture and manufacturing. This is in comparison with the earlier three quarters. The development is viewed as a boost for President Cyril Ramaphosa, who has been criticized for failing to restore buoyancy in the economy.

Ramaphosa came to power in 2018 and ever since he has been carrying out sweeping economic reforms to steer the country from various economic challenges. The country has been facing persistent electricity cuts choking growth, apart from other economic ills like creeping unemployment rates. According to official statistics released by the government, the gross domestic product (GDP) grew by 1.2% quarter on quarter in the last three months of 2021,  following a contraction of 1.7% in the third quarter.

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The economy registered a growth of 4.9% in the 2021 calendar year after contracting by 6.4% in 2020. A series of arson attacks and looting affected the country, following the imprisonment of former president Jacob Zuma for contempt of court.  Record unemployment and massive power cuts have plagued the economy. There was a flight of investments from the country. However, the slight improvement in the last quarter has been a reprieve for the economy and for the president, who has been on the receiving end for quite some time. Agriculture expanded by 12.2% quarter on quarter, manufacturing by 2.8% and retail trade sales by 2.9% for the quarter as compared to the previous quarter. But mining contracted by 3.1%, construction by 2.2% and finance by 0.8%. The unemployment rate hit a record high of nearly 35% last year.

According to the finance ministry, economic growth will be 2.1% this year. Analysts say the rate was far below the level required to make a meaningful dent in unemployment and poverty.