Like Nigeria, South Africa's economy falls into recession

Africa’s third largest economy has fallen into recession for the first time in 8 years

The value of the national currency, the Rand has fallen by 1% and the country is now seen as having a higher risk of defaulting on its debt, making it more expensive to borrow

The South African economy has been under pressure since President Jacob Zuma fired the country’s finance minister

For the first time in eight years, the South African economy has fallen into a recession.

Following a 0.3% fall in GDP in the final quarter of 2016, the country’s economic growth shrunk by 0.7% between January and March, BBC reports.

Two consecutive quarters of a slowed-down economy has thus resulted in a recession - the country’s first since 2009.

The South African economy, which is the third largest in Africa, has been under pressure since President Jacob Zuma fired the country’s’ respected finance minister Pravin Gordhan earlier this year.

On the currency markets, the value of the Rand is down by a percentage point.

Speaking on the development, the country’s deputy director general of statistics Joe de Beer said: "We can now pronounce that the economy is in recession."

He stated further: "The major industries that contracted in the economy were the trade and manufacturing sectors."


The recession has led to a downgrade of South Africa's credit worthiness to poor by two credit rating agencies: Standard and Poor's and Fitch.

As a result of this downgrade, South Africa will now be seen as having a higher risk of defaulting on its debt hence, making it more expensive for the country to borrow money.

South Africa now follows in the footsteps of Nigeria which officially entered into recession in 2016, for the first time in 29 years.

However, NAIJ.com reported recently that the Nigerian federal government has declared that the nation’s economy is gradually returning to normal.

The finance minister Kemi Adeosun made the revelation at a town hall meeting.

She said: “Nigeria is coming out of recession; we are beginning to see the signs and we will come out to become stronger.”