No clean sweep for Ramaphosa in ANC race

Alexander Winning and Ed Stoddard -

Cyril Ramaphosa may have won the race to be leader of the African National Congress, but he failed to decisively wrest control of South Africa’s ruling party from President Jacob Zuma.

Zuma’s faction retains influence in the ANC’s incoming National Executive Committee (NEC) and was felt in conference debates on divisive policies such as land expropriation and nationalisation.

Ramaphosa’s incomplete victory could stymie his chances of tackling entrenched corruption and implementing reforms to kickstart economic growth, tasks which he placed at the centre of his campaign for the ANC’s top job.

It also lessens his chances of ousting Zuma from the state presidency before his second term ends in 2019.

That could disappoint investors who have bet heavily that Ramaphosa, a 65-year-old former trade union leader and millionaire businessman, will be able to turn around Africa’s most industrialised economy.

The rand currency has been volatile since Ramaphosa’s election, as investors continue to assess how much clout he wields.

“Because Ramaphosa does not have a strong majority in the NEC and because of the lingering presence of Zuma loyalists, he will not be able to drive his own agenda,” said Darias Jonker, director for Africa at Eurasia Group.

Zuma’s decade in power has badly tarnished the ANC’s image at home and abroad as growth slowed to a near-standstill. He has survived several votes of no confidence, and analysts say he has cemented his control over the ANC by using political patronage.

The ANC’s new NEC, announced in the early hours of Thursday, is split roughly 50-50 between the Ramaphosa and Zuma factions. The party’s “top six” most powerful officials, announced on Monday, are also split down the middle.

Zuma said on Thursday that “there was no winner or loser in the election of leaders” at the ANC conference.

Were Ramaphosa to try to force

Zuma from office, he would need to secure the support of the NEC, which includes his main rival in the ANC race, former cabinet minister Nkosazana Dlamini-Zuma, Zuma’s ex-wife and preferred successor.

Others on the NEC include prominent Zuma lieutenants Finance Minister Malusi Gigaba and Energy Minister David Mahlobo, who would defend the 75-year-old leader to the bitter end.

The two most controversial policy resolutions adopted at the ANC conference on Wednesday called for land expropriation without compensation and nationalisation of the central bank. Both those policies were most vociferously backed by Dlamini-Zuma.

The expropriation of land from white farmers in neighbouring Zimbabwe had a devastating impact on food production and any mention of nationalisation in South Africa is enough to spook investors, since left-wing elements of the ANC have also called for mines and banks to be state-owned.

A senior ANC source said the Ramaphosa camp would try to ensure that the shift to full state ownership of the Reserve Bank would go no further than the resolution adopted at the conference.

The Reserve Bank said that changing its ownership structure could raise the level of uncertainty in the economy and would be costly.

Land expropriation without compensation is also unlikely to become the norm soon, but the fact that the ANC called for the constitution to be amended as a step in that direction could dent already weak investor confidence.

“This kind of rhetoric will now have to inform Ramaphosa’s speeches and perpetuate concerns over property rights at a time when the economy needs exactly the opposite signals,” said Anne Fruhauf, an analyst at consultancy Teneo.

— Reuters