South Africa's economy contracted by 0.3% in the fourth quarter from the 0.4% seen in the third quarter, according to Statistics SA.
Economists say it is due to lower production in the mining and manufacturing sectors.
Dennis Dykes, Chief Economist at Nedbank, says we still need to reach about 5% to address the country's social needs.
According to Statistics SA data, mining production shrank every month from October 2015 to December 2016.
Dykes says that might take some time because it will involve structural reform, some deregulation of dominant areas and more investment friendly policy.
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