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South Africa – Economy in Recession

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As most economic sectors contract many point finger of blame at corruption within the ruling party. 

According to data from Statistics South Africa, the country as slipped into recession for the first time in eight years, largely due to weak manufacturing and trade sectors. In the first three months of 2017 the economy contracted by 0.7%.

The trade, accommodation and catering sectors were the worst performing, contracting by around 5.9%, while manufacturing contracted by 3.7%. The value of the South African Rand (R) also dropped by around 1%.

Standard Chartered Bank’s Chief Africa Economist Razia Khan said the data showed weakness where it was not expected; the country had been predicted to have relatively high growth rates. Nonetheless, Joe de Beer, Deputy Director General of Statistics South Africa, said, “We can now pronounce that the economy is in recession.”

South Africa’s economy showed marginal positive growth for 2016, although it then contracted in the fourth quarter. The only sectors to have made a positive contribution to output growth in the country have been mining and agriculture, reported the Conversation Africa.

“The slowdown in first quarter was due to much worse results from usually stable consumer-facing sectors that had been the key drivers of growth in recent years,” Capital Economics Africa economist John Ashbourne said.

Political instability, high unemployment and credit ratings downgrades have hit business and consumer confidence, while government bonds have also weakened.

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President Jacob Zuma – CC 2011.

Pressure on President Jacob Zuma, including from within his African National Congress (ANC) party, has risen since a controversial cabinet reshuffle in March that led to downgrades of South Africa to ‘junk’ status by ratings agencies S&P Global Ratings and Fitch.

“Our economy is now in tatters as a direct result of an ANC government which is corrupt to the core and has no plan for our economy,” Mmusi Maimane, the leader of the opposition Democratic Alliance (DA) said, reported the Premium Times.

The concern is that South Africa needs strong economic growth to help reduce unemployment levels, which currently stand at more than 27%.

In a statement, the Government of South Africa said that the current growth rate, if sustained, will lead to a further decline in GDP per capita, risking the sustainability of our fiscal framework and undermining the delivery of social services.

The government added that the Minister of Finance Malusi Gigaba would be seeking a meeting with business leaders to discuss ways of working together to achieve inclusive economic growth.

Find out more in the Africa Research Bulletin:

SOUTH AFRICA: Credit Downgrades Deepen Turmoil
Economic, Financial & Technical Series
Vol. 54, Issue. 3, Pp. 21637B–21639B

SOUTH AFRICA: Anti-Immigrant Protests
Economic, Financial & Technical Series
Vol. 54, Issue. 2, Pp. 21596A–21598C

SOUTH AFRICA: Growth Falls
Economic, Financial & Technical Series
Vol. 54, Issue. 2, Pp. 21605B–21606A

Subscribe to the Africa Research Bulletin today. 

South Africa – ANC decide to leave the ICC

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The government decides to withdraw from the ICC, with concerns this could set a continent-wide precedent.

According to a ministerial representative for the South African government, they are planning to withdraw from the International Criminal Court (ICC), amongst growing external pressure as authorities ignored a court order to arrest Sudanese President Omar al-Bashir earlier in June.

Al-Bashir who is wanted by the ICC for crimes against humanity and genocide charges in Darfur, was allowed to leave South Africa after an African Union (AU) Summit, despite a ruling by a South African court to detain him. President Jacob Zuma, according to al-Jazeera, chose loyalty to a fellow AU member rather than his commitments to the ICC.

The decision prompted wide ranging international criticism; the Economist went as far to say that “Nelson Mandela’s legacy has been soiled”. Also internally human rights organisations, executive leaders and judicial members were involved in heated debates.

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Omar al-Bashir (CC)

If South Africa leaves, it will be the first country to leave the ICC, amidst a current context of numerous accusations of an anti-African bias, from a number of leaders on the continent; particularly as the only people to be successfully tried at the court have been Africans.

When South Africa first joined the ICC in 1998, the apartheid era was just coming to an end, and they had hoped that the rest of the world would follow. Even today only 123 countries have ratified the Rome Statute, which aims to prosecute those responsible for the worst international crimes, with notable absentees including the United States (US), Russia and China.

A Deputy Minister in the South African Presidency, part of the ruling African National Congress (ANC) congress, said that the ICC has “lost its direction”, accusing powerful nations of trampling on human rights and pursuing “selfish interests”, reported UK-based the Guardian.

If the decision ends up a reality then it will embody some of the fundamental problems with international jurisprudence, particularly that the ICC is powerless to enforce its authority on its own member states.

The decision taken by South Africa is particularly poignant as it sends a signal from what is perceived by many to be one of the most advanced democracies on the continent, setting a precedent for other countries to follow suit. Earlier in 2013 a group of African states, angry at charges levelled against Kenyan President Uhuru Kenyatta, called for a continent-wide withdrawal from the ICC.

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On the other hand, ICC supporters have claimed that such narratives are using ‘pan-Africanism’ as a cover from international scrutiny and human rights law, arguing that the ICC is in fact a hugely valuable tool for “rampant legal impunity”, reported al-Jazeera.

Others have noted that the apparently disproportionate targeting of Africans by the court is explained, in part, by statistical probability. Africa accounts for 34 of the court’s member states, as well as a large percentage of the violent conflicts that produces charges pursued by the court.

Ventures Africa comment that it is important to note that in the eight African countries of which the ICC has operated, the governments of Cote D’Ivoire, Central African Republic (CAR), Democratic Republic of Congo (DR Congo), Mali and Uganda have all requested that the ICC probe crimes on their soil. Only Libya and Sudan have had their cases referred by the United Nations Security Council (UNSC).

However the decision would still need to be ratified by both the upper and lower houses of parliament as much of the ICC regulation has been incorporated into domestic legal procedures, reported BBC News; although the ANC does have a large majority in parliament.

Minister for International Relations Maite Nkoana-Mashabane said that the government is taking the idea seriously, adding that the matter is on the agenda for the next meeting of ICC members at The Hague in November.

In regards to alternatives, RFI report that there have been murmurs of a transfer of authority for such international cases, in Africa, to the African Court of Justice and Human Rights, although current proposals have excluded charges brought against heads of state, as is currently in place with the ICC. Additionally the ongoing trial of Chadian ex President Hissène Habré, by a Senegalese court, has signalled wider financing issues, as the trial was delayed for many years due to a lack of funds.

Find out more in the Africa Research Bulletin

South Africa-Sudan-ICC
Political, Social & Cultural Series
Vol.52, Issue.7, Pp.20695B

South Africa-Sudan-ICC: Arrest Row
Political, Social & Cultural Series
Vol.52, Issue.6, Pp.20623B–20624C

Sudan: Damning HRW Report
Political, Social & Cultural Series
Vol.52, Issue.2, Pp.20473C–20474C

Subscribe to the Africa Research Bulletin today