An economy involves the supply of money in a country. The level of economic growth differs from one nation to another. Some factors determine economic growth, such as natural resources, infrastructure, labor, human capital, tech, and law. The performance of these factors will significantly determine the level of the economy in a country.
For example, if we look at a factor such as labor, we consider the state of employment. The high unemployment rate will result in the government collecting low taxes and therefore borrow. The costs and effects of unemployment will transfer in future generations and may bring about poor development in a state.
The current state of the COVID-19 pandemic resulted in many people losing their jobs. An example of a country that suffered the most due to coronavirus in Africa is South Africa.
Initial State of South Africa’s Economy
The economy of South Africa was already in a critical position even before the pandemic struck the earth. It was having a high rate of unemployment and power outages. The rate of unemployment was over 25% before the coronavirus disease.
According to recent reports, the economy of SA shrunk 51% in the Second Quarter (Q2) as coronavirus restriction hit the state. The drop in the three months through June was worse than what forecasters were predicting. South Africa records the 7th most significant number of coronavirus cases globally. However, the country has fewer fatalities than other nations.
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What are Officials at Statistics South Africa Saying?
General Risenga Maluleke, a statistician, says:
“This is the 1st time in history that the South African economy contracted for four straight quarters.”
The currency dropped 1% against the USD on the depressing data to trade at 16.9325 to the USD.
Joe Beer said that after adjusting for the increase in prices, the economy was the same volume in the April-June Quarter as in the 1st Quarter of 2007. Joe is a high-ranking official at Statistics SA.
Declining of South Africa’s Economic Sectors
Most of the sectors of the economy in South Africa dropped except for the sector of agriculture. It increased by 15.1% in Q2 from January-March. The sector of mining dropped 73.1%, manufacturing at about 75%, and construction at more than 76%.
The GDP for the economy dropped 17% from the same time last year. The government predicts a GDP decrease of less than 10% this year.
The Views from the Citizens
Pamela Mutandwa operates a roadside vegetable kiosk.
Pamela says:
“It was really difficult during the lockdown. No people were buying, and I struggled. When I opened in 2009, there were more customers.”
Tlouama, a petrol attendant, says that he is not happy with the current economic policies of the government. His opinion is that the government ought to be doing more to restore the factories around there so that people can get something to do.
South Africa has a long way to recovering its economy. The government should employ smart strategies to help the economy come out of the continuing recession.
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