South Africa: A Bat­tle Brews in the African Na­tional Congress

The ANC's mar­ket-ori­ented fac­tion may one day de­cide to ex­plore its op­tions out­side the rul­ing party, given its ir­rec­on­cil­able dif­fer­ences with Zuma's fol­low­ers.

Financial Nigeria Magazine - - Governance And Markets - By Strat­for

South African Pres­i­dent Ja­cob Zuma's de­ci­sion to dis­miss Fi­nance Min­is­ter Pravin Gord­han on March 30 caused up­roar among lead­ers of the rul­ing African Na­tional Congress, its sup­port­ers and the other par­ties in its Tri­par­tite Al­liance.

Forecast

In light of the lead­er­ship con­test in the African Na­tional Congress (ANC) and the re­cent dis­missal of Fi­nance Min­is­ter Pravin Gord­han, the South African govern­ment will push more pop­ulist poli­cies to en­sure that the rul­ing party's pro-labour camp re­tains its power.

Still, cor­rup­tion in­ves­ti­ga­tions could ham­per Pres­i­dent Ja­cob Zuma's abil­ity to in­flu­ence the suc­ces­sion strug­gle. The brew­ing bat­tle over Zuma's suc­ces­sor will widen the rifts in the ANC in the runup to the party's lead­er­ship congress in De­cem­ber, as Zuma works to se­cure a safe land­ing and pave the way for his de­sired heir.

Analysis

South African Pres­i­dent Ja­cob Zuma's time in of­fice may be wind­ing down, but the con­test to re­place him as head of the rul­ing African Na­tional Congress (ANC) is heat­ing up. The ANC, which has ruled South Africa since apartheid ended in 1994, will hold its next lead­er­ship congress in De­cem­ber, when Zuma will re­lin­quish his post as party leader. As the all-im­por­tant event ap­proaches, Zuma is work­ing to en­sure that he leaves the of­fice in good hands – and in good stand­ing. On March 30, he dis­missed Fi­nance Min­is­ter Pravin Gord­han as part of a Cabi­net reshuf­fle that swept 10 posts. The move caused up­roar in the ANC's top ranks, among the party's coali­tion part­ners in the Tri­par­tite Al­liance, and in in­ter­na­tional fi­nan­cial mar­kets. But it's just the lat­est episode in a suc­ces­sion saga that has pit­ted the rul­ing party's di­verg­ing fac­tions against each other and threat­ens to widen the rifts be­tween them.

A House Di­vided

Though political par­ties gen­er­ally com­prise dif­fer­ent fac­tions, the ANC is grow­ing more and more di­vided as the party moves ever closer to its lead­er­ship congress. The long·

stand­ing ten­sions be­tween Zuma and Gord­han re­flect this strug­gle: The pres­i­dent hails from the ANC's pro-labour wing, while the for­mer fi­nance min­is­ter is a mem­ber of its mar­ket-ori­ented fac­tion. Zuma be­grudg­ingly ap­pointed Gord­han to head the Fi­nance Min­istry for a sec­ond time in late 2015 af­ter his orig­i­nal choice for the post – a close con­fi­dant with lit­tle rel­e­vant ex­pe­ri­ence – met with back­lash from in­ter­na­tional mar­kets. Zuma's new pick to re­place Gord­han, an­other ally that lacked his pre­de­ces­sor's knowl­edge or skills, has like­wise pro­voked re­sis­tance among the ANC's lead­er­ship.

The shake-up has also wreaked havoc on South Africa's econ­omy. In­ter­na­tional in­vestors viewed Gord­han as a steady hand in the coun­try, a force against cor­rup­tion, and a voice of fis­cal rea­son. Af­ter he was called back to South Africa on March 27 (iron­i­cally, from an in­ter­na­tional road­show meant to drum up for­eign in­vest­ment in the coun­try) the South African rand tum­bled, drop­ping 7 per­cent by the time Gord­han was fired. A few days later, Stan­dard and Poor's down­graded South Africa's credit rat­ing to junk sta­tus for the first time in 17 years.

Fac­ing the In­evitable

But the very traits that en­deared Gord­han to for­eign in­vestors also put him in Zuma's cross-hairs, par­tic­u­larly with the lead­er­ship congress loom­ing. The event will set the ANC's course, and by ex­ten­sion that of the coun­try, for years to come. In ad­di­tion, it will de­ter­mine what the fi­nal year of Zuma's ten­ure looks like. Af­ter more than two decades in power, the ANC is still very pop­u­lar, wield­ing more in­flu­ence in South Africa than the pres­i­dent him­self does. And since Zuma's term in of­fice will last un­til roughly April 2019, his political fu­ture rides in large part on who re­places him as party leader. To en­sure that the party's eth­nic Zulu, pro-labour fac­tion re­tains power in the ANC, Zuma will have to en­er­gize and ex­pand his sup­port, for in­stance by in­creas­ing pub­lic spend­ing and push­ing pop­ulist poli­cies such as the Black Eco­nomic Em­pow­er­ment ini­tia­tive. Con­trary to Zuma's goals, how­ever, Gord­han's main pri­or­i­ties as fi­nance min­is­ter were to re­duce South Africa's deficit, rein in spend­ing and ap­peal to in­ter­na­tional in­vestors. Their con­flict­ing agen­das meant that a power strug­gle was in­evitable.

The scores of cor­rup­tion charges cur­rently hang­ing over Zuma's head, more­over, make it all the more im­por­tant that a political ally re­place him at the head of the ANC. Be­yond his fis­cal dif­fer­ences with Gord­han, Zuma un­der­took the reshuf­fle partly in an at­tempt to halt in­ves­ti­ga­tions against him and his close as­so­ci­ates over al­le­ga­tions of trad­ing in­flu­ence in the govern­ment for busi­ness in­ter­ests. South Africa's for­mer pub­lic pros­e­cu­tor de­tailed the claims in a re­port pub­lished in Novem­ber 2016, draw­ing par­tic­u­lar at­ten­tion to Zuma's ties to the wealthy Gupta fam­ily, who re­ceived lu­cra­tive govern­ment con­tracts. Now, the pres­i­dent is await­ing a de­ci­sion on his ap­pli­ca­tion to the Supreme Court of Ap­peal to dis­miss all 783 cor­rup­tion charges against him. Should the court de­cide in the pres­i­dent's favour, Zuma may hope to main­tain his stand­ing in the ANC. And if he loses, the Na­tional Pros­e­cut­ing Au­thor­ity will move for­ward with the cases against him, which would prob­a­bly get un­der­way around the same time that the ANC suc­ces­sion bat­tle starts heat­ing up. This could be a boon for Gord­han's camp, since the for­mer fi­nance min­is­ter was at the van­guard of the anti-cor­rup­tion cam­paign against Zuma.

Prospects for Power

On the other hand, the ANC's mar­ke­to­ri­ented fac­tion may one day de­cide to ex­plore its op­tions out­side the rul­ing party, given its ir­rec­on­cil­able dif­fer­ences with Zuma's fol­low­ers. Other fac­tions of the ANC peeled off to form their own par­ties in the run-up to the lead­er­ship con­gresses in 2013 and 2008. Gord­han's wing, sim­i­larly, could break away and try to co­or­di­nate with the more right-lean­ing Demo­cratic Al­liance. For now, though, the ANC's mar­ke­to­ri­ented camp seems un­likely to take such a bold step. In­stead, it will keep jock­ey­ing for power in hopes of tak­ing con­trol of enough high-level po­si­tions in the rul­ing party to clear out the old guard and its rep­u­ta­tion for cor­rup­tion. The best way to achieve that goal is to en­sure that South African Deputy Pres­i­dent Cyril Ramaphosa clinches the top spot dur­ing the party congress. Ramaphosa has al­ready re­ceived an en­dorse­ment from the Congress of South African Trade Unions (COSATU), a promi­nent mem­ber of the ANC-led Tri­par­tite Al­liance.

His vic­tory would bode ill for Zuma, how­ever, sig­nalling a split be­tween his of­fice and that of the ANC's leader. The rift could eas­ily re­sult in the kind of bumpy tran­si­tion that the South African pres­i­dent knows all too well. Af­ter all, Zuma came to power in 2008 on a wave of dis­con­tent that re­called then-Pres­i­dent Thabo Mbeki – who had by then lost his place at the head of the ANC – just months be­fore the end of his term. Zuma's de­sire to pre­serve his legacy, and his sup­port­ers' de­sire to con­tinue en­joy­ing the spoils of power, will likely com­pel him to throw his weight be­hind a can­di­date ca­pa­ble of pro­tect­ing his eth­nic Zulu, pro-labour coali­tion. At this point, his ex-wife, Nkosazana Dlamini-Zuma, seems to fit the bill. A for­mer govern­ment min­is­ter who has main­tained close political ties with the pres­i­dent, Dlamini-Zuma re­turned to South Africa in mid-March af­ter con­clud­ing her term as chair of the African Union Com­mis­sion in Ethiopia. Since then, the ANC's League of Women has en­dorsed her to lead the party. If cho­sen as the ANC's next pres­i­dent, Dlamini-Zuma will prob­a­bly con­tinue her ex-hus­band's lead­er­ship style and pol­icy ap­proach.

But in the mean­time, the con­test to suc­ceed Zuma at the head of the ANC will be bru­tal. The strug­gle could widen the fis­sures in the rul­ing party be­yond re­pair, weak­en­ing its in­tegrity and caus­ing fur­ther breaks from the ANC. And depend­ing on its out­come, the tran­si­tion could even lead to Zuma's re­call from the South African presidency. Ei­ther way, the coun­try faces a rough road ahead be­tween now and De­cem­ber.

“South Africa: A Bat­tle Brews in the African Na­tional Congress” is re­pub­lished with the per­mis­sion of Strat­for, un­der con­tent con­fed­er­a­tion be­tween Fi­nan­cial Nigeria and Strat­for.

The scores of cor­rup­tion charges cur­rently hang­ing over Zuma's head, more­over, make it all the more im­por­tant that a political ally re­place him at the head of the ANC.

Demon­stra­tors protest against South African Pres­i­dent Ja­cob Zuma in Pre­to­ria, South Afric on April 7, 2017

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