South Africa emerged from recession in the third quarter of the year, easing pressure on President Cyril Ramaphosa over his handling of the economy.
But the recovery may be shortlived as Eskom, the struggling state electricity monopoly, imposes a spate of phased power blackouts on industry.
Africa’s most industrialised economy grew 2.2 per cent quarter on quarter in the three months to the end of September, ending a recession that marred Mr Ramaphosa’s first months in power after he replaced Jacob Zuma earlier this year.
Rebounds in manufacturing, finance and trade drove the recovery despite an 8.8 per cent drop in mining output, South Africa’s statistics agency said on Tuesday.
But on Tuesday the country entered its sixth consecutive day of the so-called “load-shedding” — outages aimed at forestalling total blackouts — as Eskom’s power plants continued to struggle.
The crisis has exposed the difficulties facing Mr Ramaphosa as he attempts to revive the South African economy, which stagnated under his predecessor.
The country’s output has not grown for more than three consecutive quarters since 2014-2015 and has not surpassed annual growth of 2 per cent since 2013. Central bank forecasts for annual growth in 2018 remain weak at less than one per cent.
“While we welcome this positive news, we remain concerned that our economy is not growing fast enough,” a spokesperson for the ruling African National Congress said on Tuesday.
The economy is facing deep structural problems such as high jobless rates among the black majority and lack of investment.
Mr Ramaphosa is also seeking to reassure investors that the ANC will not compromise property rights as it moves ahead with a constitutional change to allow the expropriation of land without payment.
The ANC says the policy is necessary to ease massive inequality in land ownership that has persisted since the end of apartheid. South Africa’s parliament debated the measure on Tuesday.
An index of agribusiness confidence has fallen to its lowest level since 2009, in part because of uncertainty over land reform. “Any reckless move in policy which might undermine property rights could dent investment and long-run growth prospects in the sector,” Wandile Sihlobo, head of research at the Agricultural Business Chamber, said.
Mr Ramaphosa has said he is making progress on a target to raise $100bn of international investment, but he faces difficult decisions on how to fix broken state companies such as Eskom.
Business confidence fell under Mr Zuma as corruption and waste became rife in government and in state-owned companies.
His successor has moved to crack down on graft as the ANC battles to hold on to power in elections next year.
Mr Ramaphosa made a critical anti-corruption appointment on Tuesday, naming a veteran prosecutor to rebuild the national prosecuting authority, which lost credibility under the leadership of Zuma allies.
His appointee Shamila Batohi, an adviser to the prosecutor of the International Criminal Court, promised to “fight the good fight” in the role. She is expected to take the lead on prosecutions including a longstanding corruption case against Mr Zuma and those involving the controversial Gupta business family, which have recently faltered. The Guptas and Mr Zuma have denied any wrongdoing.