Local Politics

South Africa Sees Glimmer of Hope Despite Talk of a Global Recession

Economists are pencilling in a local economic contraction of up to 1% from April to June. Much of the world is also a mess, with talk of a global recession. Despite all this, the South African economy remains resilient. Here’s why.

There was a wave of optimism in the first three months of 2022 when South Africa’s economy opened up under substantially eased Covid regulations, allowing unfettered public life to return after two years.

This helped South Africa’s more than R5-trillion economy to grow by 1.9% in the first three months, recovering back to pre-Covid levels.

There were positive developments in President Cyril Ramaphosa’s economic reform agenda, which seeks to boost the economy and private-sector investments. The government raised R14.4-billion by auctioning radio spectrum to telecommunications companies for the first time in 17 years, which will ultimately improve the quality of communications and ease mobile data costs.

The government opened up the sixth round of procuring more electricity from renewable sources to ease the energy crisis. And Transnet’s creaking rail and freight operations will open up, allowing the private sector to participate and improve efficiency.

But, from April, all the economic momentum and optimism faded. Eskom’s rolling blackouts intensified. Heavy…

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