South Africa’s ruling African National Congress 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.
The race has been dominated by Deputy President Cyril Ramaphosa, 65, generally favored 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% after courts ruled that 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 16-20 December conference in Johannesburg are not bound to vote for the candidate their ANC branch nominated, meaning it is unclear if he will actually win the post.
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% 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 industrialized economy has been lackluster 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.
Zuma cracked jokes at an ANC dinner on the eve of the conference and said that “it has been a worthwhile experience” and that he looked forward to stepping down as leader. He is expected to make a more formal speech at the start of the conference. He can remain as head of state until 2019.
The 75-year-old president has denied numerous corruption allegations since taking office in 2009 and has survived several no-confidence votes in parliament.
“People can’t wait to see his back,” political analyst Prince Mashele said in a newspaper opinion piece.
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