South Africa and Nigeria nearing end of recession?


South Africa's gross domestic product (GDP) growth rate was 2,5 per cent in the second quarter.

The industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.

Economists polled by Reuters had expected a quarter-on-quarter GDP expansion of 2.1% and a year-on-year expansion of 0.4%.

This growth was higher relative to growth recorded in Q2 2016, 3.01 percent.

Statistics South Africa said the country was on track for record-breaking maize crops if production continued at estimated levels, according to figures from the Crop Estimates Committee.

"The fact that the NBS can boldly say, when the Statistician-General is up for renewal, that the economy is in recession and inflation has gone up to 17 per cent, speaks a lot about the integrity of the bureau. The growth from the low base in the first quarter will mainly be driven by improvements in mining, manufacturing, agriculture and trade", said Nedbank economists earlier this week in a research note.

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Since the first quarter of 2016, the Nigerian economy had contracted for five consecutive quarters, NBS said. It contributed 0.7 of a percentage point to overall GDP growth. The reality is South Africa has experienced an "economic drought" since about 2011.

"The growth rate is not what planners would have wanted".

Household consumption bounced back, advancing 4,7% quarter-on-quarter (q/q), the fastest growth since the second quarter of 2012, as consumers spent more on clothing and footwear (26,7% q/q) and on food and alcoholic beverages (10,1% q/q).

In the fourth quarter of 2016, the rate of contraction was 0.3 percent.

On his part, Ola Azeez, the managing director of Remolaz Management Consult, said it was good that the economic statistics were giving Nigerians a ray of hope but their livelihood had not changed. Oil prices reached the year to date peak of $56pb in April before declining to $47pb at the end of the second quarter.

Answering questions in the National Assembly in June, President Jacob Zuma said government would forge ahead and implement pro-growth intervention measures to reignite growth after the economy slipped into a technical recession.