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President Cyril Ramaphosa during his speech at the summit of "Chinafrique" in Beijing on September 4, 2018. Lintao Zhang / POOL Via REUTERS
The bad news is accumulating for Cyril Ramaphosa, for the second consecutive quarter the South African economy shrinks -0.7% - which makes the country is technically in recession. A figure that surprised analysts who expected a rebound after the decline of 2.6% in the first quarter. South Africa suffers mainly from declining agriculture and high unemployment. The risk is to see the rating agencies lower the debt and thus increase the cost of credit.
Cyril Ramaphosa did not need any more bad news. With large state-owned companies, such as the Eskom electrician, stuck in debt, mining companies announcing, one after the other, plans for dismissal, agrarian reform that is causing deep debate, the president already has many challenges to face. .
The head of state will now have to convince the rating agencies not to degrade the South African note, which would increase the debt a little more, it already absorbs one sixth of the national budget.
With a currency, the rand, at the lowest in two years, rising inflation, and a record budget deficit, it is a vicious circle that is being put in place.
The authorities tried to react with a policy of rigor by raising at the beginning of the year the VAT of 1%. But suddenly, demand has weakened. Agriculture, transportation, trade and manufacturing are down in the second quarter even though the mines are rebounding.
As for unemployment, it exceeds 27% of the active population. South Africa, the most industrialized country on the continent, is now ranked third, behind Nigeria and Egypt.
► (Re) read: South Africa: will the "ramaphorie" last?