COUNTRY IN FOCUS •
FRAGILE ECONOMY WILL
BE HARD HIT
By Jacques Nel, head: Africa Macro at NKC African Economics
The South African economy had already entered 2020 on a very fragile
footing before the dramatic external developments related to the Covid-19
pandemic. We expect a 5% real GDP contraction this year.
Leon Louw
Rural areas in South Africa will feel the pinch in the aftermath of Covid-19.
Domestic policy uncertainty and supply-side
constraints have now been accompanied by a
deterioration in global business sentiment and a
drop in demand for South African goods, all weighing on
the country’s economic recovery prospects. In addition, the
nationwide lockdown, which commenced o 27 March, will
result in a collapse in consumer spending.
weeks, and timely and effective government responses will
be required to ensure that this does not become another
African tragedy.
The economic impact of the coronavirus epidemic will be
considerable, but the human cost will be higher yet. South
Africa remains the hardest-hit African country from a confirmedcase
perspective and the expected economic hardship reflects
this. However, South Africa is also arguably the best-placed
country on the continent to deal with the pandemic.
While it does have a large immune-compromised population
due to its struggles with HIV, the country might be able
to leverage its sophisticated private healthcare sector to
supplement inadequate public services. Most other African
nations will not have this benefit. Confirmed Covid-19 cases
will undoubtedly increase across the continent in coming
Leon Louw
Mineworkers at a shaft before Covid-19. In a post Covid-19 world, miners
will be expected to maintain strict social distancing.
www. africanmining.co.za
African Mining Publication
African Mining
African Mining • May 2020 • 15