Deputy President Cyril Ramaphosa
Photo by: Duane Daws
While South Africa’s economy is on a downward slope now, it will resurge and “go up as it has always done in the past”, Deputy President Cyril Ramaphosa told journalists in Tokyo on Tuesday.
Ramaphosa, who is leading a delegation of government and business leaders on a trip to Japan, told the Japanese National Press Club that the Chinese economy slowdown is a concern for all economies and “no doubt it has an impact and will have an impact on the South African economy”.
South Africa’s economy is battling on all fronts: GDP contracted by 1.3% in the second quarter of 2015 and the rand hit a low of R14/$ this week (at 12:00 it was trading at R13.14/$), egged on by market turmoil in China.
While Eskom has not enforced load shedding for the past 17 days, the 99 days of load shedding it had implemented in 2015 has caused manufacturing and mining output to decrease, Stats SA figures show.
Ramaphosa, who political analysts see as a possible successor to President Jacob Zuma, said South Africa’s leaders had confidence in government's ability to manage the country's economy to go on the up again.
“Economic activity is cyclical, it goes up and down, but right now we are confident we will keep steady, we will manage the slump down as we move on to higher levels of growth,” he said.
Confidence in China
The impact of China’s economic slowdown has had a major impact on South Africa’s market.
“China has emerged as our largest trading partner, we sell lots of commodities to China and as they slow down, their demand for commodities also become lesser and lesser,” said Ramaphosa, who led a similar delegation to China in July. "So it does have an impact on us."
“We have great confidence in the Chinese government's ability to manage that economy, to manage it back to growth and back to life,” he said.
“Like many other economies in the world, we are beginning to feel that impact,” he said. “Obviously our economic sector ministers have to sit down and discuss precisely how we should respond to this.
“We will be able to find solutions and come up with some strategies.”