South Africa's economy plummets by most in a decade

JOHANNESBURG (AP) — South Africa’s economy dropped by the largest amount in a decade, the government announced on Tuesday, hurting newly elected President Cyril Ramaphosa’s efforts at growth and reforms.

The government said the economy declined by 3.2% in the first quarter of 2019 from the fourth quarter of 2018, when growth was 1.4%. South Africa fell into recession briefly late last year, and some observers worry that sub-Saharan Africa’s most developed economy is slipping into it again.

Widespread power outages earlier this year were in part to blame for the first-quarter drop. South Africa’s important mining sector fell by 10.8% and manufacturing sector by 8.8%, with agriculture down 13.2%.

Ramaphosa first took office early last year after predecessor Jacob Zuma was forced to resign amid corruption allegations. Public outrage over graft scandals hurt the ruling African National Congress in last month’s election, which won its weakest majority in a quarter-century in power, and the new administration now faces the challenges of reviving the economy and restoring public and investor confidence.

Eskom, which provides most of South Africa’s electricity, has debt of more than $30 billion and is at the center of Ramaphosa’s efforts to rid state-owned enterprises of corruption and mismanagement. He faces some pushback, however, amid worries about layoffs in a country where the unemployment rate is 27%.


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