South Africa fell into its second recession in as many years at the end of last year as severe power blackouts defeated President Cyril Ramaphosa’s efforts to revive growth in the continent’s most industrialised nation.
The economy contracted by 1.4 per cent in the fourth quarter compared with the previous three months, official statistics revealed on Tuesday, far outpacing analyst forecasts of a 0.2 per cent decline.
The contraction came after a 0.8 per cent drop in the economy during the previous quarter, leading to South Africa’s second recession since 2018.
The decline was broad-based with most sectors of the economy recording falls in output, South Africa’s official statistics agency said.
Eskom, the country’s broken state power monopoly, descended into its worst generation crisis towards the end of 2019 as ageing plants broke down en masse.
The resulting blackouts left mines, factories and shopping centres in darkness for hours at a time.
South Africa’s rapid return to recession will pile the pressure on Mr Ramaphosa, whose pledge of a “new dawn” for the corruption-battered economy has flagged since he became president two years ago.
Mr Ramaphosa has been facing fierce resistance in the ruling African National Congress to his planned reforms to Eskom and other state-owned companies.
Overall South Africa’s economy expanded 0.2 per cent in 2019, far below the rate of population growth.
“On a full-year basis, it signals the weakest economic growth seen since the global financial crisis, and this is even before the hit to growth from the coronavirus slowdown globally,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered.
