Zuma Has Next Move in ANC Power Battle as Gupta Home Raided


(Bloomberg) -- The noose tightened on South African President Jacob Zuma as the police went after key allies while leaders of the ruling African National Congress vowed to force him from office.

Police raided the Johannesburg home of the Gupta family, who are in business with Zuma’s son, Duduzane, early Wednesday as the nation awaited the president’s next move in his struggle for power with Cyril Ramaphosa.

Zuma Has Next Move in ANC Power Battle as Gupta Home Raided

Time is against Zuma, South Africa’s ultimate political street fighter, as Ramaphosa has relentlessly grabbed political space since he won the presidency of the party by a razor-thin majority in December. The ANC expects Zuma to respond to its decision to replace him Wednesday, its spokesman Pule Mabe told Johannesburg-based state broadcaster SAFM. The presidency said no media event was scheduled.

Zuma succeeded in delaying the inevitable last week when his apparent willingness to negotiate prompted Ramaphosa and the rest of the ANC leadership to postpone a meeting of their top body, the National Executive Committee, to decide his future. But as the talks dragged on, the NEC decided late Monday that his time was up. When he countered by asking to remain in office for up to six months, the party bosses said enough is enough.

“It’s not up to Zuma now; he no longer has any option,” said Mpumelelo Mkhabela, a political analyst at the University of Pretoria’s Center of Governance Innovation. “They gave him the option to take control of his own resignation, and when that didn’t work the party took control. The idea of trying not to humiliate him didn’t work.”

While ANC Secretary-General Ace Magashule was at pains to show respect for the president on Tuesday, saying Zuma had done nothing, critics say his tenure will be remembered as a time when South Africa went from being known as a “rainbow nation” to one colored by corruption.

The ANC’s former head of intelligence, Zuma took office in May 2009, just weeks after prosecutors dropped graft charges against him. He spent years fighting a bid by opposition parties to have those charges reinstated and fending off allegations that he allowed the Guptas to influence cabinet appointments and the award of state contracts.

A spokesman for the investigative police unit known as the Hawks, Hangwani Mulaudzi, couldn’t confirm a report by eNCA that one of the Gupta brothers was arrested during the morning raid. The rand strengthened after the report.

Zuma Has Next Move in ANC Power Battle as Gupta Home Raided

In his battle with the ANC, the principal card Zuma has left to play is the threat of disruption. Should he resist the order to resign, the party’s next option is a no-confidence motion in parliament. The problem is the third-biggest opposition party, former ANC youth leader Julius Malema’s Economic Freedom Fighters, already has one on the table, set for Feb. 22.

Voting for an opposition motion would put the ANC in an uncomfortable position, yet opposing it would keep Zuma in power.

Even if the ANC is able to schedule its own motion before that of the opposition -- which legally will be complicated -- approval of the proposal will mean Zuma’s entire cabinet must also resign. While that will present Ramaphosa with a clean slate, it would complicate the Feb. 21 annual presentation of the budget, which investors are anticipating will show the nation’s new leaders are committed to fiscal consolidation.

Already the political impasse gripping South Africa has forced the unprecedented decision to postpone the annual state-of-the-nation speech. Another delay of a major event such as the budget would smell of a serious political vacuum in Africa’s most-industrialized economy.

The drop in the party’s public support during Zuma’s rule -- the ANC lost control of Johannesburg, the economic hub, and Pretoria in municipal elections in 2016 -- ironically gives him leverage.

Struggling Economy

The party desperately needs a smooth transition, so Ramaphosa, a 65-year-old lawyer and one of the richest black South Africans, can move quickly to fulfill pledges to revive the struggling economy, clamp down on corruption and rebuild its image ahead of elections scheduled for mid-2019. Any delays in parliament and establishing a new government will harm the party’s chances.

“The National Executive Committee firmly believes that this situation requires us to act with urgency in order to steer our country towards greater levels of unity, renewal and hope,” Magashule said. “We are determined to restore the integrity of the public institutions, create political stability and urgent economic recovery.”

The prospect of a Ramaphosa presidency has cheered investors, with the rand gaining the most against the dollar of all currencies tracked by Bloomberg since his Dec. 18 election as ANC leader. It was 0.9 percent stronger at 11.8619 at 10:45 a.m. in Johannesburg.

“He is finished,” said Mkhabela. “The only thing he needs to do is step down, which is really a procedural matter. He does always like to drag things out and there is a little room for him to refuse to resign, but the end result will be the same.”

©2018 Bloomberg L.P.

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