South Africa faces a big economic storm

Recession hit South Africa has been the fifth-worst hit country in the world measured by the number of coronavirus cases. The local stockmarket has so far dodged the worst of the fallout, but worse may be to come for its economy.

Cape Town, South Africa © Getty Images
South Africa’s public debt could soon exceed its GDP
(Image credit: © Getty Images)

“The storm is upon us,” says South African president Cyril Ramaphosa. Already in recession before the pandemic hit, South Africa has been the fifth-worst hit country in the world measured by the number of coronavirus cases. Last week the International Monetary Fund approved an emergency $4.3bn loan to Pretoria, its biggest pandemic-related disbursement yet.

South Africa’s prompt April lockdown ushered in a period of “Ramaphoria”, says Ivan Fallon in The Times, but there is “widespread disillusion” as a worsening situation has forced new curbs. The first confinement proved economically ruinous, with three million job losses, thanks in part to the closure of the tourism industry, the economy’s biggest employer. The economy is forecast to contract by 12% this year. To top it all, new problems at electricity monopoly Eskom have brought yet more power cuts.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.