SOUTH AFRICANS TO BE MORE INNOVATIVE TO AVOID RECESSION
By: Amanda Mqadi
“South Africa’s economy has shrunk in the second quarter raising the risk of a recession in Africa’s most industrialized and fast developing nation.”
This is according to Sthembiso Phoswa an accounting graduate from the University of KwaZulu-Natal (UKZN).
Phoswa said that the South African rand fell to its lowest in 14 years, trading at R14 against the US dollar. He added that the recent poor rand performance has been linked with a fall in
the Chinese market, which recently crippled the global market.
“Household constraints will be constrained as there is a lack of sufficient income and salaries are low,” added Phoswa.
Phoswa said that food, fuel and electricity prices will continue to rise and the weaker South African currency has not helped the situation. Additonally, people tend to go into debt as they
borrow money from loan sharks and banks.
“People need to note how the economy suffers during such traumatic times as it affects us all,” added Phoswa.
The accounting graduate told Journalismiziko about the factors which have contributed to the South African struggling economy.
“Domestic issues such as load shedding, strikes in the mining sector and climate change have largely contributed to our weak economy,” explained Phoswa.
He added that it is not fair to blame the weak rand solely on the Chinese market, but that every South African needs to play an active part in the what we need to do is to find
solutions, solutions that will see us out of this situation.
Ziphozonke Mlangeni, a chartered accountant who works for Olwandle Chartered Accountants, said that possible solutions relieve pressure to the country’s struggling
“An economy is deemed to be in recession if it has endured two consecutive quarters of shrinking growth, which is something that we have witnessed here in South Africa,” said
“South Africa needs to become more innovative, find ways to refine our own minerals and turn them into final product and also find ways to eliminate the mining industry strike
because they contribute a lot on the country’s GDP,” added Mlangeni.