The economy of South Africa shrunk by 1,2 percent in the first quarter of 2016, according to Statistics South Africa report released today.
To find out what this means for our economy, CapeTalk's Africa Melane spoke to Dennis Dykes, Chief Economist at Nedbank.
Dykes says they were expecting a small contraction, and did not anticipate the much larger percentage figure announced by Stats SA.
He says it is both understandable and concerning.
It is understandable considering the severe impact of the drought on the agricultural sector as well as the big down turn in the commodities market in the mining sector.
Dykes says the country needs to create an enabling environment for investment to take place and also ways to encourage businesses to set up an international market.
I think we need to go back to simple basic principles in the National Development Plan and really drive the investment climate and make it a much more attractive destination.— Dennis Dykes, Chief Economist at Nedbank
Dykes says he is puzzled that the National Development Plan is being overlooked while it can offer very good guidance in getting the country out of the woods.
It's a big puzzle because its been adopted by the ANC and Cabinet, yet it is perplexing... there are so many implementable items which should make a big difference.— Dennis Dykes, Chief Economist at Nedbank
Listen to the full conversation below: