The impact of the global financial crisis on decentralized government in South Africa

Abstract

Th e global fi nancial crisis has had a severe impact on South Africa.1 Th e economy went into recession in 2008/09 for the fi rst time in 17 years. Nearly a million jobs were lost in 2009 alone. Growth has resumed, but the recovery is fragile, and another recession possible. Rising unemployment and poverty have placed greater demands on state resources even as revenues contracted, and there is mounting political pressure on government to review its economic policy. Th is paper examines the impact of the global fi nancial crisis on South Africa, in particular on how the highly centralized federal system absorbed and responded to the crisis. We make two arguments: First, the political implications of the crisis are far-reaching.