Editorial | Difficult economic road ahead of SA

Former president, Jacob Zuma
Former president, Jacob Zuma
Image: Alaister Russell

ANC leader Enoch Godongwana is right about one thing. The Jacob Zuma administration was disastrous for our economy.

The effects of its mismanagement and grand scale looting, in particular from state-owned enterprises, will be with us possibly for years to come.

In response to news this week that the SA economy was in a technical recession, Godongwana, who is the ANC’s head of economic transformation, said the mismanagement over the past five years had damaged the economy.

However, not only would it be disingenuous to trace all our economic woes to that period, pointing fingers in Zuma’s direction, although justifiable, will not necessarily take us out of the slump in which we find ourselves.

What we need is a government and business strategy powered by the political will to get the basics right.

The SA’s economy contracted 0.7% in the three months to the end of June, following a dismal performance in the first quarter, a contraction of 2.6% revised from 2.2%.

As if to add to our woes, on Thursday credit ratings agency Moody’s halved its growth forecast for SA, from 1.5% to between 0.7% and 1% in 2018.

This weaker economic performance adds to the fiscal and monetary policy challenges posed by the 20% depreciation of the rand against the US dollar so far in 2018.

The response from the government so far, although it expressed shock, has been a plea for calm.

This is no doubt a difficult trick to master considering what is likely to be a situation becoming worse before it gets better.

If anything, these figures should serve as a reminder to all of us that to revive our economy will take much more than the political euphoria brought about by changes in the ANC leadership last December.

Ahead of us is a long and difficult road which demands that some hard decisions be taken to raise the level of accountability, and to build a culture of efficiency at all levels of the state and its economic partners.