Economy in recession – Policy change required to turn around South Africa
5 March 2020
Statistics South Africa published its gross domestic product statistical release for the last quarter of 2019 this week on Tuesday 3 March 2020. The South African economy shrank by 1.4 per cent in the fourth quarter of last year, following a decline of 0.8 per cent in the preceding quarter, meaning that the country’s economy fell into a technical recession. There are many global and domestic reasons for the contraction, including the resumption of load shedding in October 2019.
What is the way forward?
The May 2019 ANC general election manifesto correctly emphasises the need for a change in our macro-economic framework in order to tackle the systemic problems of stagnantly low growth, crisis-high unemployment rate and other macro-economic policy failures. The manifesto was drafted by the ANC in consultation with the Alliance and endorsed by all its formations, other progressive forces and the majority of the electorate by vote in the ballot.
In his foreword to the manifesto, President Cyril Ramaphosa precisely underlines the national imperative of transforming the South African “economy to serve all the people, through interventions that promote a developmental growth path to create more jobs and decent work”. President Ramaphosa correctly further states: