Natasha Marrian Political editor: Business Day

Political mismanagement by the administration of former president Jacob Zuma, who was fiercely protected and kept in power by the ANC, is to blame for the economic "mess" SA finds itself in today.

The ANC’s head of economic transformation Enoch Godongwana admitted that mismanagement over the past five years had damaged the economy, which is in recession for the first time since 2009 when the global financial crisis caused a worldwide slowdown.

Now, with the right leadership and economic framework, the economic situation was likely to stabilise, Godongwana told Business Day on the sidelines of a media briefing in which the party detailed its plan to turn the situation around.

President Cyril Ramaphosa, who served as deputy president under Zuma, returned Nhlanhla Nene to the helm of the Treasury in a February cabinet reshuffle, but the economy is yet to improve, with unemployment remaining near record levels.

Under Zuma’s administration, SA had four finance ministers, including Nene, over a two-year period, a political move with questionable motives that had a massive negative effect on the economy. In addition to creating turmoil at the Treasury, Zuma appointed his ally, Tom Moyane, to the helm of the SA Revenue Service. Moyane’s running of that institution resulted in a R50bn hole in revenue collection for 2017-2018 alone, with the Treasury admitting that this culminated in the state having to increase VAT for the first time in two decades, putting pressure on consumers.

However, while Zuma was ANC president, the party came to his defence, and he survived three motions of no confidence in parliament, even after meddling with the Treasury, amid evidence of state capture.

Now that Zuma has been removed from office, the ramifications of his mismanagement of the economy are being felt — even by the party, particularly as the 2019 national election edges closer.

Godongwana said there was "demonstrable evidence" across the world that there was a link between economic growth and electoral support. "No party would be happy about going into elections in a recession mode."

The economy is expected to recover slightly in the second half of the year, with Goldman Sachs forecasting lacklustre growth of 0.8% for the year. To boost the economy, the ANC is calling for key interventions, including the activation of the "stimulus package" discussed at its July national executive committee lekgotla. A figure of R43bn has been mooted for this, but there are questions about where the government will get the money for this, and no details have been provided.

Senior ANC leaders, who spoke on condition of anonymity, have also raised concern about "those charged with managing the economy", including Nene and Ramaphosa, who were criticised for not acting decisively enough on macro-economic policy issues.

Criticism from inside the ANC was that Nene had to "jack up" and that diverting the state’s response to the recession to his medium-term budget, due in October, did little to allay fears and inspire confidence.

But Godongwana dismissed this, saying the right leadership was now in place to turn around the current situation.

The government had to take immediate steps to increase growth by "activating macro-economic tools, institutional efficiencies and specific sector interventions" to mitigate the effects of the contraction in economic activity, he said.