JOHANNESBURG: South Africa’s ruling African National Congress (ANC) holds an election this weekend – seen as too close to call – to replace Jacob Zuma as party leader, with the winner also likely to become the next president.
The ANC will announce current president Zuma’s successor as party leader on Sunday, concluding a bruising leadership battle that threatens to split the 105 year-old liberation movement, which has been in power since 1994. Zuma’s term as head of state runs out in 2019.
The race has been dominated by Deputy President Cyril Ramaphosa, 65, generally favoured by financial markets, and Nkosazana Dlamini-Zuma, 68, a former cabinet minister and chairwoman of the African Union Commission.
South Africa’s rand firmed 2 percent after courts ruled senior officials in two provinces seen as supporting Dlamini-Zuma had been illegally elected and could not attend the conference. “Early signs of a win for Cyril Ramaphosa, the more investor-friendly option, have provided support for the rand,” John Ashbourne, Africa economist at Capital Economics, said.
“But while Mr. Ramaphosa is popular among party members, the result will be decided by political insiders, who may opt for his leftist opponent, Nkosazana Dlamini-Zuma.”
Ramaphosa won a majority of the nominations to become leader of the party, but delegates at the Dec. 16-20 conference in Johannesburg are not bound to vote for the candidate their ANC branch nominated, meaning it is unclear if he will actually win. Ramaphosa has recently stepped up his criticism of Zuma’s scandal-plagued government, while Dlamini-Zuma has said her priority is to improve the prospects for the black majority. To his supporters, Ramaphosa’s business success makes him well-suited to the task of turning around an economy grappling with 28 percent unemployment and credit rating downgrades.
In contrast, Dlamini-Zuma is seen as a fierce campaigner against racial inequality whose hostility to big business has rattled investors in South Africa.
“The outcome is difficult to predict. This creates considerable uncertainty that is reflected in significantly increased volatility for the rand,” Elisabeth Andreae, analyst at Commerzbank, said in a note. Growth in Africa’s most industrialised economy has been lacklustre for the last six years, and the jobless rate is near record levels. Analysts say the ANC leadership battle has made it hard to reform the economy and improve social services.
The election of a successor to Zuma is perhaps the most pivotal moment for the ANC since it took over the leadership of South Africa after apartheid ended. Zuma’s presidency, tainted by scandal and allegations of corruption, has badly tarnished the ANC’s image both at home and abroad. In a move likely to please the party’s rank and file, Zuma announced hours before the conference kicked off that South Africa would raise subsidies to universities to 1 percent of GDP over the next five years from nearly 0.7 percent at present. Speaking at a breakfast of businessmen and politicians at the venue of the ANC conference, Finance Minister Malusi Gigaba said South Africa’s government would take “necessary tough decisions” to stabilise public debt and grow the economy.
Published in Daily Times, December 17th 2017.