Technical recession is in simpler terms defined as a downgrade to the country’s investment ratings in two successive quaters. Taking into cognisance that in the last quater of 2016 [September-December], South Africa experienced an investment rating of 0.3% contraction, therefore, the 0.7% Tuesday’s downgrade[January-March2017] could not have come at a worse time as it speaks to the actual technical recession as per the definition.
Both the trade and manufacturing industries are the ones that are mostly at the receiving end of the stick as their Gross Domestic Products have been at an all time low. When he delivered the first budget speech under the DA lead coalition government in the City of Johannesburg on the 23rd May2017, Member of Mayoral Council Dr Dagada alluded to the fact that we are in the era of economic calamities whereby “a further downgrade in our investment ratings would thus raise the cost of debt , resulting in the city pouring more resources into servicing debt instead of servicing our residents.”
However, there still are some positives in the midst of this predicament in the form of economic growth to both the agronomy and mining industries. This growth should bring a sigh of relief considering that the former does not only require politico-economic stability but further calls upon divine Interventions through adequate rainfall and optimum climatic conditions. “Despite our poor economic climate, i believe that we can still take steps to ensure that Johannesburg is in the position to achieve a 5% economic growth by 2021 which will benefit all our residents especially the poor”. Said Dr Dagada. Indeed we all have a role to play in ensuring that we keep hope alive for the betterment of our economy so that we equally share the responsibility as members of the society constituted by those that own means of production and those that provide labour.
The lesser we entertain the leadership scandals that grace our screens each time we switch on our televisions, the better it will be for us to continue working without being demoralized to effect our projected goal of 5% growth in 2021. Of course, these scandalous allegations that are seriously levelled to some of our National government members do more harm than good in relation to boosting our country’s investor confidence.
The late chief economist at econometrics in DrTony Twine used to say:’ one does not need to be Thabo Mbeki to understand that political stability and free market enterprise are the basic tenets of attracting foreign investments within ethical guidelines.’ The manufacturing and trade industries are within our control, hence it is not a train-smash to be downgraded at that level, with good regrouping, we can turn the tide. I submit.