South Africa unexpectedly fell into its first recession for almost a decade, exacerbating the rand’s decline amid the recent emerging-market rout and heaping pressure on President Cyril Ramaphosa.

Africa’s most-industrialized economy shrank an annualized 0.7 percent in the second quarter, an outcome that was far worse than any forecaster had anticipated. The outcome casts a pall over the country’s new leadership, providing an uncomfortable parallel with the initial phase nine years of Ramaphosa’s predecessor, Jacob Zuma.

The news underscores the fragility of South Africa’s economy at time when the country has been dragged into the emerging market turmoil of the past month that engulfed Turkey and Argentina. Slack farming output and soft consumer spending were among the weak spots.


Cyril RamaphosaPhotographer: Simon Dawson/Bloomberg
Ramaphosa’s rise to power since December initially boosted sentiment and the rand following Zuma’s tenure of almost nine years. That optimism faded as economic reforms weren’t implemented fast enough and global trade wars and turmoil in other emerging markets soured sentiment.

“It’s showing that this economy remains in the doldrums, that we are in desperate need for policy certainty and structural reform to get us onto a growth path,” Elize Kruger, an economist at Paarl, South Africa-based NKC African Economics, said by phone. “This type of environment is difficult for job creation. We’ll get stuck in our low-growth term if we can’t get out of this.”
The rand weakened 2.9 percent to 15.2973 per dollar in Johannesburg. Yields on rand-denominated government bonds due December 2026 rose 21 basis points to 9.22 percent, the highest level since before Ramaphosa became leader of the ruling African National Congress.

A contraction for the fourth quarter of 2016 was later revised to show growth, resulting in this being the first recession since the financial crisis of 2009.

Highlights from the release include the following:

Agriculture declined the most, recording an annualized 29.2 percent contraction

Mining production expanded 4.9 percent from the previous quarter

Manufacturing shrank 0.3 percent

Trade contracted 1.9 percent

https://www.bloomberg.com/news/articles/2018-09-05/jpmorgan-blackrock-warn-of-contagion-pummeling-emerging-markets

Ok

This news will encourage APC government in their failure and also BMC'S in their Daftness. Trust me lalasticlala ,I know how these guys reason

Donald95:
This news will encourage APC government in their failure and also BMC'S in their Daftness. Trust me lalasticlala ,I know how these guys reason

How?

If Nigerian entrepreneurs were smart and savvy (which they are not by a long shot).. they would jump on opportunities like this to buyout and or take up majority shares in as many struggling South African tech, financial, agro and more.. companies as possible and divert them to Nigeria. There, through shear size of population and demand they'll have extensively more means to grow and thrive. Later they can extend the services back to the South African market from a position of authority. Unfortunately this isn't a very Black-African way of thinking, and is why their nations will always lag behind. Meekness is a curse.

That's what laziness gets you. Now that they are hungry and poor we will see many of them carrying their xenophobic hiv selfs to Nigeria to beg in streets. Stupid country.