"The ANC today is at its weakest and most vulnerable since the advent of democracy," Ramaphosa told delegates at talks to map out the party's new direction in Johannesburg.
The weaknesses, Ramaphosa said, "are evident in the distrust, the disillusionment, the frustration that is expressed by many people towards our movement and our government".
He said the party of late anti-apartheid icon Nelson Mandela was now a "divided movement", with rifts "driven by competition for positions and access to public resources, and patronage as well".
The cracks were resulting in "weakened governance", he said, urging delegates to come up with "clear policies", "coherent ideas" and "practical solutions".
"This is a defining moment for the ANC... but more importantly for our country," he said.
Support for the ANC dipped below 50 percent for the first time in local polls last November, amid growing disappointment with the party that has ruled the country for nearly three decades since the end of apartheid.
Critics charge that the government lacks a national plan to tackle poverty, inequality and 34.5-percent unemployment worsened by the coronavirus pandemic, or even provide basic services such as electricity and water.
The party's current talks are a prelude to the ANC national elective conference in December, when it plans to hold internal polls to pick a candidate for the next presidential election.
Ramaphosa is expected to seek a second five-year term, but could face a challenge from a faction of the party that is loyal to former president Jacob Zuma, who has been accused of corruption.
The three-day meeting, which runs until Sunday is also expected to address graft allegations against ANC members.
A state corruption inquiry report published earlier this year named more than 200 of its members, including some senior officials.
Ramaphosa himself is also mired in a scandal following a break-in at his game and cattle farm.
