This is the worst figure since the third quarter of 1984 when GDP was at -6.5 percent. South Africa is the continent’s largest economy.

“It is the first technical recession in South Africa since the fourth quarter of 1992,” read the statement from SSA.

Following the news of the recession, President Jacob Zuma arrayed fears of a further economic meltdown, assuring the nation that his government would device all means to get out of the economic quagmire.

“My government will accelerate spending on infrastructure and public works,” said the President.

However some government officials questioned whether the ANC party could still afford the big-ticket items that were key to its election manifesto.

A senior official at Zuma’s first cabinet lekgotla said the recession news came as a shock to new ministers mapping out the government’s plans.

“All our plans rest on the performance of the economy. With economic data that shows we are in a recession, it means some of our plans will have to be tweaked a bit.

“What is compounding the issue is the threat of strikes and more companies shedding jobs. Our task has just become even more difficult,” said the official.

A senior businessman in Pretoria Sithole Ndlovu said that citizens would hold the government accountable and demand on their election promises,

“With recession now upon us, the government must stick to the promises made during the elections; otherwise the entire country will be in disarray.”

With the recession in full glare, companies would have no choice but to cut down on employees.

“Soaring job losses will take their toll on consumers as businesses go into survival mode and try to cut costs through retrenchments,” said economic David Shapiro.
The danger of the recession for the man on the street is that he stands to lose his job. The poor will remain poorer, unless the tide turns.

“We already have socio-economic problems like high unemployment and poverty; that’s our soft underbelly. A recession could lead to social unrest,” said Shapiro.

Spending wisely

In the wake of recession, South Africans have been urged to spend their hard-earned cash wisely. In a plea to consumers, who make up about 60 percent of South Africa’s economy, economist Shapiro urged them to spend ‘only the cash they had and not take on any more debt’.

“We’re not saying go into a hole now, but the ultimate aim is to reduce your debt so you can have a little more money to spend,” he said. “Set aside non-essential spending, make the car last a little longer, paint your house next year, not this year.”
He also advised against selling houses now because prices were set to drop further this year.

Nationwide strikes

The country braces for a widespread public sector strike among civil servants, including doctors, prison wardens, bus drivers and even broadcasters. They all demand better pay and majority have threatened to down their tools, come Thursday, if their pleas are not met.

Another issue compounding the recession is the retrenchment of workers. More and more companies are gearing up to shedding jobs as they can no longer afford to pay workers.
The ANC said yesterday it had received a clear mandate from the electorate to respond decisively to the global crisis.

“In the period ahead, the ANC will accelerate and expand its investment in public infrastructure. It will step up a massive programme on expanded public works linked to infra structure and meeting social needs,” it said.

Economists expect two more quarters of negative growth before the economy improves. They confirmed that the mining and quarrying and manufacturing sub-sectors in particular were responsible for the bulk of the GDP weakness, contributing -1.7 and -3.3 percentage points respectively to the -6.4 percent drop.