ANC Battles Slow Ramaphosa's Drive to Transform South Africa

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(Bloomberg) -- South African President Cyril Ramaphosa may have won the battle to lead the African National Congress, but the war to fully control the ruling party is threatening his drive for structural policy change.

Ramaphosa’s shaky hold over the party became clear when he had to use his government authority this month to take control of North West province after the ANC failed to force Premier Supra Mahumapelo from office following protests in the region. While Mahumapelo took a leave of absence, faction fighting is also rampant in areas such as KwaZulu-Natal, where Jacob Zuma enjoys widespread support following his February resignation as president.

“Ramaphosa as the president of the ANC faces a huge battle in terms of uniting the party,” said Zakhele Ndlovu, a political science lecturer at the University of KwaZulu-Natal. “Right now it is deeply divided, particularly in provinces such as the North West and KwaZulu-Natal, where you have provincial chairpersons of the party who are more loyal to Jacob Zuma than they are to the ANC.”

After winning the ANC presidency by a razor-thin majority and with opponents of his candidacy in the party’s top-six leadership, Ramaphosa, 65, deftly ended Zuma’s scandal-ridden administration by maneuvering him out of office. Investors cheered his pledge to clean up state-owned companies and fight corruption, with the rand gaining 15 percent against the dollar since mid-November, the most globally.

“Ramaphoria” effect

While he has moved quickly to overhaul state enterprises, on other economic fronts the so-called “Ramaphoria” effect has had little impact. The jobless rate remained near a 15-year high of 26.7 percent in the first quarter, and confidence indexes have now returned to levels they were at late last year as businesses await the delivery of promised economic reforms.

The government said in a prospectus filed with the U.S. Securities and Exchange Commission for a sale of Eurobonds on Tuesday that there’s no guarantee its reform initiatives “will achieve or maintain the necessary political support in the short or long term.”

Zuma, who’s facing graft charges, has refused to fade away, appearing at rallies and this week at the KwaZulu-Natal provincial legislature. His supporters portray him as a victim of prejudice against the Zulu people and Ramaphosa as a pawn of “white monopoly capital.”

But Ramaphosa has a proven track record at playing the long game. He founded South Africa’s biggest mineworkers’ union, led the ANC delegation at talks that ended apartheid and produced the nation’s first democratic constitution, and amassed a fortune during a 14-year stint in business.

Enemies Abound

While Ramaphosa’s strength in the party appears to grow incrementally day by day, enemies abound, especially those who opposed his bid to become the ANC president, including party Secretary-General Ace Magashule.

“Their biggest worry is that because they did not support him going into the national conference of the ANC in December, that maybe he might turn against them,” said Ndlovu. “So they are trying to cling to power.”

He said he’s hearing that some pro-Zuma provincial leaders, particularly in KwaZulu-Natal, are considering discouraging people from voting for the ANC in national elections next year as a way to sabotage Ramaphosa.

The government, in its prospectus, conceded that political and policy uncertainty may increase ahead of that vote.

Political Impact

“If the national government in unwilling or unable to implement necessary reforms and address corruption due to political factors, this is likely to have an adverse impact on the republic’s economy and its ability to raise capital in the external debt markets in the future,” it said.

How the ANC fares in next year’s election will determine Ramaphosa’s future, according to Ivor Sarakinsky, academic director at the University of the Witwatersrand’s School of Governance in Johannesburg.

Under Zuma, the party lost control of several cities, including Johannesburg, the economic hub, and the capital, Pretoria, in a 2016 municipal vote when it won just over 54 percent, its worst showing since the nation’s first multiracial contest in 1994.

“If the ANC’s support drops below 50 percent under his watch, it’s pretty certain that he won’t be the head of the party for much longer,” Sarakinsky said. “The outcome of the 2019 elections is absolutely crucial in terms of whether he survives as the ANC leader -- that’s what it comes down to. It’s going to be huge.”

©2018 Bloomberg L.P.

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