South Africa’s President Jacob Zuma today said he was confident that the country will emerge sooner than expected from its first recession for eight years.
Africa’s most advanced economy unexpectedly contracted in the first quarter of this year, pushing it into its first recession since 2009.
“This situation is of serious concern to government,” Zuma told parliamentarians in Cape Town. “I’m very positive that we are going to come out of this technical recession quicker than we believe.”
South Africa’s economy has undergone sluggish growth in recent years and in April it lost its investment grade credit rating when the world’s two major rating agencies, Fitch and Standard & Poor’s, downgraded its sovereign debt to junk status.
The downgrades came shortly after Zuma’s dramatic ministerial shake-up in which he sacked respected finance minister Pravin Gordhan.
Despite the recession, Zuma said his government would forge ahead with a costly deal to build new nuclear infrastructure.
“Government is sill intent on pursuing the nuclear new- build programme at a pace and scale that the country can afford,” he said.
South Africa currently has the only operational nuclear reactors on the continent and is seeking to revamp its atomic energy programme in a bid to end its reliance on coal for electricity production.
The government says the eight planned reactors would supply an additional 9,600 megawatts of electricity — more than five times the output of the existing nuclear infrastructure.
But the one trillion rand (USD 77 billion) price tag announced in 2010 has drawn fierce criticism from both opposition and ANC lawmakers.