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Same-Day Analysis

South African president highly likely to be removed early but resistance to resigning will delay economic recovery

Published: 20 December 2017

South African Deputy President Cyril Ramaphosa has succeeded President Jacob Zuma as head of the ruling African National Congress after a narrow victory over Zuma's former wife, Nkosazana Dlamini-Zuma, in the election at the party's conference on 18 December.



IHS Markit perspective

Outlook and implications

  • Ramaphosa's top priority is likely to be the removal of controversial South African President Jacob Zuma to give himself time to repair the economy and unify the ANC ahead of national elections in 2019.
  • Zuma's multifarious legal troubles mean he is likely to refuse any party-ordered mandates to resign, likely necessitating yet another parliamentary confidence vote to remove him.
  • The election of three members of the Dlamini-Zuma camp in the ANC's top six leadership positions means Ramaphosa may have to make policy concessions to secure their support to oust Zuma and for his economic recovery programme.

Risks

Government instability; Corruption

Sectors or assets

All

South African Deputy President Cyril Ramaphosa consoles Nkosazana Dlamini-Zuma at the ANC conference in Johannesburg on 18 December after beating her for the party presidency.

Mujahid Safodien/AFP/Getty Images: 894904352

South African Deputy President Cyril Ramaphosa was elected the new leader of the ruling African National Congress at its elective conference in Johannesburg on 18 December, defeating Nkosazana Dlamini-Zuma by a narrow margin. Ramaphosa received the backing of 2,440 delegates, while 2,261 favoured Dlamini-Zuma after a contest marred by allegations of vote-buying and intimidation. The vote puts Ramaphosa in pole position to become the country's next president at a general election due in the second quarter of 2019, stepping up from his current role as deputy president. Jacob Zuma remains head of state for now, but the defeat of his former wife Dlamini-Zuma, whose candidacy he strongly endorsed, raises the risk of Zuma being forced out before the end of his term. Zuma engineered the departure of his predecessor as national president, Thabo Mbeki, after becoming ANC president in December 2007.

The election outcome was tempered for Ramaphosa by three of the six leadership positions on the ANC National Executive Council going to backers of Dlamini-Zuma. This was possible because for the first time each position was voted for separately, rather than the winning party presidential candidate being able to impose their slate, as has been the case previously. The new ANC deputy president is Mpumalanga provincial premier David Mabuza, a Zuma ally who had come to prominence as a potential kingmaker by the surge in delegates from his province. The ANC deputy secretary-general is Jessie Duarte, but the most controversial outcome was the victory of Free State premier Ace Magashule over former KwaZulu Natal leader Senzo Mchunu. On the first count, Mchunu had the most votes: a recount showed Magashule won by just 24 votes, but the published numbers did not add up to the number of delegates meant to have voted, and Mchunu has called for a recount.

Outlook and implications

Ramaphosa's victory has already led to a surge of optimism among the business community and investors. His win is being interpreted as signalling the beginning of the end for a culture of corruption, crony capitalism, patronage-based politics, influence peddling, and racially charged rhetoric. Ramaphosa has already stated he wants to create a million jobs in five years, through creating special economic zones, introducing tax reforms, and offering incentives to encourage manufacturers to hire. He also wants to repair a strained relationship with mining companies and provide the industry with greater policy certainty so they can take on more workers.

Zuma's defeat is the most significant setback in his long, chequered, and increasingly controversial political career. In the week prior to the conference, he had suffered two other setbacks. On 8 December, the High Court invalidated Zuma's appointment of Shaun Abrahams, the director of the National Prosecuting Authority, who will decide whether Zuma should face trial on 783 corruption charges relating to a 1999 arms deal. As national deputy president, Ramaphosa has been mandated to name a new director within 60 days, although Zuma has inevitably appealed against the court ruling. Additionally, on 13 December, Zuma was ordered by the High Court to set up within 30 days a judicial inquiry into allegations of state capture, originally requested by then public protector Thuli Madonsela in November 2016. The court also ordered that Zuma should be personally liable for the costs of attempting to stop the inquiry. Since the Madonsela report was written, a huge cache of emails has been released which provides further details of links between the Zuma family and the three Gupta brothers, businessmen who have been accused of using their influence to win inflated state contracts for a network of companies they control, allegations they all deny.

Facing all this trouble, Zuma is likely to dig his heels in, and ignore any party orders to step down as national president. He may calculate that such a strategy will increase his chances of being offered immunity in some form. However, Ramaphosa has been so forcefully critical in recent weeks of state capture and corruption that it would damage his standing within the party and chances in the 2019 election if Zuma were treated leniently. This suggests the only recourse for Ramaphosa would be to engineer yet another no-confidence vote in parliament. Without the support of the ANC party machine Zuma would be highly unlikely to survive, constitutionally elevating Ramaphosa – as current deputy president of the country – early to the national presidency. This will still take some weeks to arrange; however, Ramaphosa is uncomfortably aware he needs as much time as possible to start repairing the damage done to the economy by Zuma in order to secure the presidency in 2019 and for the ANC to retain its parliamentary majority against a strong challenge from the main opposition Democratic Alliance and the radical Economic Freedom Fighters.

In order to gain support to force out Zuma, Ramaphosa may have to start making his first policy compromises with the representatives of the Dlamini-Zuma camp in the ANC leadership. Although their loyalty to a lame-duck president is likely to be limited, they may use the opportunity to push for greater inclusion of their agenda in Ramaphosa's economic plans than he may want. This would include a greater mandated share of black business ownership in a variety of sectors, and more stringent local-content regulations. Statements from Ramaphosa and other senior figures within the ANC on Zuma's immediate future, and any progress on the legal moves against the president will give the first indication of how long he may have left in office and when the repair work can begin.

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