Opinion / Columnist
South Africa heads for an economic crunch
07 Sep 2018 at 10:16hrs | Views
South Africa is likely going face a recession starting from the last quarter of this year. The recession is mainly attributed to the malfunctioning of the agricultural sector, the mining sector, the telecommunications sector and the expropriation of land without compensation exercise.
The recession is most likely to affect the lower class as they are the ones that relatively get the least remuneration. The country is currently in a 2.4% deficit and the economy has so far shrunk by 0.6% which has since led to the influx of price hikes and the weakening of the Rand.
Economic expert Gerald Mwandiambira said that South Africans have to brace themselves for a financial crunch by cutting down on expenses as well as saving more. "Job losses and impulsive price hikes are most likely to be witnessed in South Africa during the Last quarter."
Already the country is sitting on a 26% unemployment percentage with more than 2 million youths unemployed. On the other hand President Cyril Ramaphosa received a combined investment amount of more than 24 billion dollars from Saudi Arabia and China but that money is yet to manifest itself on where it has really made significant impacts.
The recession has since been met by devastating outcomes as on Tuesday tuck-shop owners that comprise of the Pakistan, Chinese, Bangladeshis, and Somalians amongst other foreign tuck-shop owners got their merchandise looted in the Areas of Johannesburg South and Soweto.
Although the foreign nationals are viewing the incident as an act of xenophobia the resident of these areas that the reason why they conducted the looting operation was as a result of the bad merchandise that these foreign nationals sell and the fact that they don't have locals at their tuck-shops. However, minister of health Dr. Aaron Motsoaledi said that of the 470 tuck-shops that were looted none of them tested positive in terms of selling food that was contaminated or substandard products. He also advised South Africans to desist from the operation since these foreign nationals are also trying to irk a living through these tuck-shops.
The minister of finance Nhlanhla Nene also advised South Africans not to panic but to keep their composure as their country faces the recession. Also complimenting the minister of finance's remarks was the minister of public service and administration Ayanda Dlodlo who refuted the claims that government was going to retrench some workers.
However, the government has since started embarking on a cutback exercise which involves reducing the security personnel and incentives of some government officials.
The recession is most likely to affect the lower class as they are the ones that relatively get the least remuneration. The country is currently in a 2.4% deficit and the economy has so far shrunk by 0.6% which has since led to the influx of price hikes and the weakening of the Rand.
Economic expert Gerald Mwandiambira said that South Africans have to brace themselves for a financial crunch by cutting down on expenses as well as saving more. "Job losses and impulsive price hikes are most likely to be witnessed in South Africa during the Last quarter."
Already the country is sitting on a 26% unemployment percentage with more than 2 million youths unemployed. On the other hand President Cyril Ramaphosa received a combined investment amount of more than 24 billion dollars from Saudi Arabia and China but that money is yet to manifest itself on where it has really made significant impacts.
Although the foreign nationals are viewing the incident as an act of xenophobia the resident of these areas that the reason why they conducted the looting operation was as a result of the bad merchandise that these foreign nationals sell and the fact that they don't have locals at their tuck-shops. However, minister of health Dr. Aaron Motsoaledi said that of the 470 tuck-shops that were looted none of them tested positive in terms of selling food that was contaminated or substandard products. He also advised South Africans to desist from the operation since these foreign nationals are also trying to irk a living through these tuck-shops.
The minister of finance Nhlanhla Nene also advised South Africans not to panic but to keep their composure as their country faces the recession. Also complimenting the minister of finance's remarks was the minister of public service and administration Ayanda Dlodlo who refuted the claims that government was going to retrench some workers.
However, the government has since started embarking on a cutback exercise which involves reducing the security personnel and incentives of some government officials.
Source - Daniel Itai
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