Daggers drawn for Zuma as ANC licks its wounds
AS THE ANC mulls over coalitions in the Tshwane, Johannesburg and Ekurhuleni metros, the daggers are again out for President Jacob Zuma in Gauteng following the party’s dismal performance in South Africa’s economic hub.
All three metros are hung, with no party having an outright majority, but the DA has a bigger share of the vote in Tshwane and the ANC bigger shares in the other two.
With the ANC losing Tshwane and only managing to hang on to Johannesburg and Ekurhuleni by a narrow margin, Gauteng ANC leaders have renewed their calls for Zuma. They believe he is “the elephant in the room” that cost them the votes because of the ongoing corruption allegations and many scandals associated with his administration. They also accused him of “messing up” their election campaign because of his racially divisive statements about the DA.
Faction fighting in the ANC in Tshwane was behind its poor showing at the polls, say party insiders.
According to at least three high-ranking members of the ANC in the Tshwane region, it was no surprise to them the DA emerged with the majority of votes. They alleged that branch members were told to only vote for ward councillors and intentionally spoil the proportional representation ballot.
There were voters who chose not to vote at all largely because their preferred candidates had been taken off the nomination lists.
All these measures were taken to sabotage ANC mayoral candidate Thoko Didiza, who had been “imposed” by the national executive committee, they said.
The calls for Zuma’s head, along with the possible permutations of coalition governments, will be high on the agenda when the provincial executive council meets today.
It was reported yesterday that there might be calls from within the ANC national executive committee for an early or special conference where an “elegant exit” for Zuma should be finalised.
For the first time, the ANC failed for get more than 50% in the key Gauteng metros. Three senior ANC leaders in Gauteng corroborated each other in their stance against Zuma, and the permutations of coalitions.
“One of the reasons we lost is that at the PEC, we softened that stance because the other groupings sold us out because they said, ‘Let’s defer,’” said one leader. He was referring to the provincial leadership’s position in April when it resolved that Zuma should resign as party and state president. It later backed down.
They blamed the divisions in the Gauteng leadership squarely on “Zuma’s dictatorship”.
Dictatorship
“Dictators survive by weakening the organisation. They attack the organisation where it is strong, and Gauteng is weaker now because we are divided,” said the leader.
He said while the issue of e-tolls remained problematic, Zuma was way too costly and had spoilt their campaign.
“His campaign was negative, saying the DA is a white party and Mmusi Maimane is working with the whites. He actually messed up our campaign because he made statements that were racially divisive.”
Gauteng ANC spokesman Nkenke Kekana refused to comment on the question of anger at Zuma, saying he did not want to “speculate”.
The Gauteng ANC leaders admitted that forming coalitions would not be an easy decision. “It’s going to be a tough decision to make,” said another leader, giving scenarios of the options available.
The first would be a coalition of all major parties, “with a threshold of anything from all parties who got 5% votes”.
“The other option is for the two parties that are almost in a stalemate to approach the smaller parties to keep out the other. But if you leave out the DA, they may paralyse the government by refusing to co-operate,” he explained.
While the EFF looked like a viable option for the ANC, the sticking point was the acrimony between the red berets and ANC’s national leadership.
“The EFF says if anything, Zuma must resign. The ANC, on the other hand, refuses to acknowledge the EFF. But the hostility towards the EFF is a result of a faction of the ANC.”
He pointed out that if no agreement was reached for a coalition, in terms of the constitution, the provincial government would have to ask the MEC for local government to run the cities while waiting for a re-election because of the stalemate.
DA Gauteng leader John Moody dismissed suggestions of a coalition with the ANC and repeated the need for an alliance with the EFF.
“The EFF are critical, but we won’t go into coalitions for the sake of governing. We need to look at how to constitute an effective government.”
RATINGS agencies and economists are keeping a close eye on South Africa’s economic policy after the ANC suffered its worst results in local elections since 1994, with Fitch on Friday warning that this increased the risk of more “populist government” policies.
Support for the ANC dropped to below 60 percent for the first time in an election.
Peter Attard Montalto, an emerging markets economist at Nomura, said: “We need to watch policy very carefully… Indeed, it would be extraordinary to suggest that there would be no change in policy. It would be the only ruling party anywhere that would not attempt to secure future election victory through policy, in part at least.”
Fitch said there was a risk that the ANC would turn to more populist policies to address rising voter dissatisfaction with perceived insufficient improvements in living conditions since the end of apartheid. “This could include costly spending measures that could require breaching expenditure ceilings,” it said.
Fitch rates the country as one notch above sub-investment grade at BBB- with a stable outlook.
Track record
In June Fitch warned that the country needed to build a track record of improved growth performance to improve its rating.
Meanwhile, Moody’s Investors Service said: “Increased political competition, as indicated by South Africa’s local election results so far, has the potential to boost reform momentum in the run-up to the 2019 national elections, but spending pressures are also likely to rise. “Over the medium to longer term, this would indicate a shift from redistributive policies towards more growth-orientated economic management and effective service delivery.”
Election results were “broadly in line with expectations”, Ravi Bhatia, a director and lead analyst at S&P Global Ratings, said. S&P rates South Africa at one level above junk, with a negative outlook.
On Friday at 5pm the rand was R13.7761 to the dollar.
Sanisha Packirisamy, an economist at MMI Investments and Savings, said the market had viewed the election outcome as broadly positive, with the rand strengthening.
She said with South Africa facing mounting economic challenges, the emphasis placed on government initiatives, such as the National Development Plan, and a commitment to working more effectively with business and labour remained crucial to accelerating economic growth, creating jobs and eradicating poverty.
Greater control
Maarten Ackerman, an advisory partner and investment strategist at Citadel, said different management in some of the municipalities, and far greater control in others where the ANC would be forced to enter into a coalition, was likely to find favour in the markets, and “we believe that there could be further rand strength for the balance of 2016”.
With confidence up in the wake of the election results and the possible beginnings of a bottoming in the economic cycle, the rand could enjoy further support, Ackerman said.