South Africa

Infighting within the ruling African National Congress (ANC) party is expected to intensify through 2017, ahead of the 54th National Conference in December 2017; an electoral summit where a new party leader will be chosen to replace the embattled Jacob Zuma, whose second term in office comes to an end in 2019. Divisions within the ANC have led to two roughly defined factions; a pro-Zuma camp and a pro-ANC camp. The pro-ANC camp includes those who see Zuma as a grave liability to the party and are seeking his exit. The ‘Zuma liability’ became apparent through the August 2016 municipal elections in which total ANC support dropped to 53.9%, from 62.93% in 2011. The main opposition party, the liberal Democratic Alliance (DA) which has governed the Western Cape province since 2009, saw an increase from 24.1% in 2011 to 26.90%, gaining control over the central metropolitan municipalities of Tshwana (Pretoria), Johannesburg, and the symbolically important Nelson Mandela Bay in the process. The radical left-wing Economic Freedom Fighters (EFF) party, formed in 2013 by expelled ANC Youth League leader Julius Malema, gained 6% of the vote in the 2014 national election and 8.2% in the 2016 municipal polls. The municipal elections are a good indicator of voter support ahead of General elections scheduled for 2019, which suggest that the ANC will retain a small majority, however, factionalism may erode support further, especially if opposition parties are able to win over rural voters, which traditionally make up the bulk of ANC votes.

The pro-Zuma camp will support the president’s endorsement of Nkosazana Dlamini-Zuma (his ex-wife and a former chair of the Africa Union Commission) as his successor as party leader. This loyal faction are eager to protect the lucrative patronage networks established under his tenure and which are expected to continue under hers. Dlamini Zuma also appears to have the support of rural ANC officials, including the powerful “premier league”, consisting of Ace Magashule (Free State), DD Mabuza (Mpumalanga), Supra Mahumapelo (North West) and Sihle Zikalala (KwaZulu-Natal) as well as the ANC Women’s League (ANCWL) and the ANC Youth League (ANCYL). Dlamini Zuma also appears to be pushing a more-women-in-politics narrative, which may be geared towards encouraging higher levels of female participation in the 2019 general elections.

Despite this hardcore of supporters, Zuma’s influence over the party succession is weakening due to factionalism. In line with ANC tradition, Deputy President Cyril Ramaphosa is expected to succeed Zuma as party leader at the national conference. The pro-ANC camp, who support Deputy President Cyril Ramaphosa, include Gauteng provincial ANC officials, COSATU (the Congress of South African Trade Unions), and the National Union of Mineworkers (NUM). The ANC, overall, is likely to agree on Ramaphosa as he is more palatable than the alternative, is considered pro-business (which may assuage investor uncertainty), and with the support of trade unions, may appeal to the urban electorate within Gauteng, and reverse some the ANC’s losses.

It is also unclear whether Zuma will complete his term in office. The possible reinstatement of corruption charges and an investigation into Zuma’s dealings with a prominent business family, as outlined in the Public Prosecutors “state capture” report in November, threaten to further undermine the president’s position within the party; the negative press strengthening the ‘Zuma liability’ factor. Whoever succeeds Zuma as party leader will have much influence over the conduct and outcome of these investigations. There is a possibility that Zuma will be offered an ‘early retirement’ in exchange for charges dropped against him, and immunity once he leaves office.

Populist rhetoric is likely to increase through 2017 and 2018. This has a number of broadly defined objectives designed to reverse ANC electoral losses, including bolstering the party’s socialist credentials and placating left-wing faction and alliance members. This is also an attempt to reduce the appeal of the radical EFF and to recapture votes from its strongholds in the North West and Limpopo provinces. It will also be an attempt to deflect blame away from systemic ANC governance failures, scapegoating minorities through “white monopoly capital” and related narratives. Populist rhetoric will appeal to unemployed voters, who make up approximately 26% of the electorate. These moves further increase expropriation risks, as demonstrated by the new Expropriation Bill passed by the National Assembly in early 2016 which does away with the “willing-buyer-willing-seller” model in favour of expropriation with compensation, determined by a government adjudicator. All in all, political uncertainty will continue to weigh on investor confidence in the year ahead, as the economy struggles with volatile currency fluctuations, stagnant GDP growth and the threat of a ratings downgrade.

If you have found an error, spelling or other, please, notify me by selecting that text and pressing Ctrl+Enter.