DA and IFP put blame for the recession squarely on the ANC
'Our economy is currently on life-support as a direct result of a corrupt and failing ANC government, which has no plan for our economy'
DA leader Mmusi Maimane will write to National Assembly speaker Baleka Mbete requesting an urgent debate on getting the country’s economy "up and running again" after Statistics SA announced that the country was in recession, for the second time in two years.
However, it is technically the first recession since the financial crisis because the figures for the fourth quarter of 2016 were revised upwards, indicating that SA was not actually in recession last year.
The economy has battled to fully recover and stabilise after former president Jacob Zuma’s disastrous tinkering with the National Treasury at the end of 2015, as part of state capture. Stats SA announced on Tuesday that the economy is officially in recession, with GDP growth down by 0.7% in the second quarter of 2018, following the huge 2.6% contraction in the first quarter.
The economy is set to be a critical issue in the 2019 national elections — and the announcement of a recession less than a year before the polls does not bode well for the governing ANC, already taking a hammering due to the revelations about its leaders before commissions of inquiry on state capture and on Sars.
At the Sars inquiry, it has already emerged that the 1% increase in VAT, the first increase in two decades, would not have been necessary if it were not for the R50bn shortfall in revenue collection by the tax agency — which, as is becoming increasingly evident before the commission, was caused by mismanagement of Sars by suspended commissioner Tom Moyane.
Reacting to the news, Maimane blamed the ANC’s economic policies and its inability to create jobs for putting SA into recession. He said that despite a change in leadership of the ANC — from Zuma to President Cyril Ramaphosa — very little had changed.
"There has been no fundamental change to the ANC’s approach to the economy. Corruption, policy incoherence, crumbling state-owned enterprises (SOEs), lack of investment, and unstable governance continues to produce economic instability and rising unemployment. We cannot continue down the same path any longer," Maimane said.
"Crucially, the ANC’s mismanagement of the economy reaches well beyond just those who are unemployed. GDP per capita statistics show that actual household income has been in decline for the past five years."
Maimane said SA was getting "poorer and poorer" under the ANC, with record high levels of unemployment, the VAT increase and rising fuel costs all engulfing South Africans this year.
Said Maimane: "Our economy is currently on life-support as a direct result of a corrupt and failing ANC government, which has no plan for our economy. We will never achieve a united, non-racial and prosperous nation without a growing economy that creates jobs, opportunity and wealth for all. What SA now requires is leadership that understands our economy and appreciates that without a strong and thriving economy, we will never address the injustices of our past."
IFP national spokesperson and MP Mkhuleko Hlengwa says ANC policy failures are to blame for the recession. He called on Ramaphosa to "urgently" table a recovery package before parliament and address the nation, business leaders and investors to ease market jitters and save the rand.
He echoed Maimane, saying that very little has changed under Ramaphosa and added that the ANC has "run out of ideas and has now, once again, tanked our economy back to the levels of the 2008 global economic crisis".