Graft Crackdown by South Africa’s ANC Boosts Election Prospects

South Africa’s ruling party is cracking down on leaders implicated in corruption, a move that may help it woo back disgruntled voters and reclaim control of several key cities in local government elections in October.

The African National Congress on Wednesday suspended Ace Magashule, a top official who’s facing charges including money laundering and fraud. His sidelining came a week after President Cyril Ramaphosa acknowledged the party needs to do more to combat graft that became endemic during his predecessor Jacob Zuma’s nine-year rule.

Internal polls conducted by the ANC show that corruption, rather than rampant unemployment and inequality, tops the list of voter concerns, said Fikile Mbalula, the party’s head of elections and a member of its decision-making National Executive Committee. Forcing Magashule to step aside should go some way to proving it’s serious about tackling the scourge.

“The ANC is faced with a choice to renew or die,” Mbalula said in an interview. “At some point we did veer away from good values and we are prepared to break with the past.”

The African National Congress resolved in 2017 that officials facing criminal charges should quit their posts. Its top leaders finally decided last month to implement the directive and suspend errant members who refuse to step aside. Bongani Bongo, an ANC lawmaker who previously served as Zuma’s state security minister, is among others in the firing line. He and Magashule both deny wrongdoing.

Founded in 1912, the ANC is Africa’s oldest political movement and led the fight against White-minority rule. It took power under Nelson Mandela in the first multiracial elections in 1994, and has secured an outright majority in every national vote since then.

The party was rocked by repeated corruption scandals during Zuma’s rule, and the government has since estimated that more than 500 billion rand ($35 billion) was stolen from its coffers. Disgruntlement over the looting saw the ANC lose control of Johannesburg, the economic hub, Tshwane, which includes the capital, Pretoria, and several other cities in the last municipal election in 2016.

The party’s fortunes have picked up since it forced Zuma from office in 2018 and replaced him with Ramaphosa. It reclaimed power in Johannesburg after an opposition coalition unraveled, and its share of the vote ticked up in national polls in 2019.

Magashule, who as ANC secretary-general oversaw the day-to-day running of the party, has repeatedly undermined Ramaphosa’s authority. His exit should help the president consolidate his control over the ANC and give him greater leeway to implement economic reforms needed to revive the coronavirus-battered economy.

Rand Gains

The rand strengthened as much as 0.8% against the dollar on Wednesday after news of Magashule’s suspension broke, outperforming all emerging-market peers except Brazil’s real. Bonds reversed declines, with yields on benchmark 10-year securities falling two basis points.

The ANC plans to focus on door-to-door campaigning for the October vote, because of limitations on large gatherings imposed due to the coronavirus, according to Mbalula. The party aims to win outright majorities in all the main cities because coalition governments aren’t optimal, but it is prepared to work with any opposition party should the need arise, he said.

The ruling party could be hamstrung by a lack of funds -- it owes millions of rand to the national tax agency and other creditors -- and its ability to raise new money could be hindered by new public disclosure rules. Its relationship with labor unions and the South African Communist Party, which have backed it in prior elections, has also been strained by the government’s attempts to pare back spending and freeze civil-servant wages.

©2021 Bloomberg L.P.

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