Mandela’s Party Falters as Fighting Splits Century-Old ANC in South Africa

South Africa’s ruling African National Congress is battling to contain internal rifts over economic policy and leadership posts as Africa’s oldest political movement marks its centenary.

The party of Nobel Peace Prize winners Nelson Mandela and Albert Luthuli has won more than 60 percent support in every election since the first all-race vote in 1994. That monopoly over power in Africa’s largest economy belies mounting instability in the ANC as militant youth groups and labor unions vie for control ahead of party elections in December.

ANC Youth League leader Julius Malema, who is fighting his suspension from the party, ridiculed President Jacob Zuma in songs at a provincial party rally last month as the league switched its support to Deputy President Kgalema Motlanthe. Zwelinzima Vavi, general-secretary of the Congress of South African Trade Unions, said on Dec. 13 corruption is a “cancer” eroding the ANC, the labor group’s alliance partner.

“I don’t think the ANC is as strong organizationally as what it was five or 10 years ago,” Susan Booysen, a political analyst at the Johannesburg-based University of Witwatersrand, said in a telephone interview. “It’s become factional warfare” within the party’s ranks.

The divisions have impeded the ANC from taking a decisive stand against Malema’s call for the state to nationalize mines and banks, or overhauling labor laws that the International Monetary Fund says discourage hiring.

‘Ascent of Populism’

Eurasia Group, a New-York-based risk analysis company, identified South Africa in a Jan. 3 report as one of the top 10 geopolitical areas with potential for instability in 2012 because of the “ascent of populism” within the party and the leadership struggle.

“While politics seems to be maturing in many emerging markets, politics in South Africa increasingly stands in the way of economic growth,” Anne Fruhauf, Eurasia’s Africa analyst, said in an e-mailed response to questions. “Zuma’s need to maintain alliances will make it difficult to decisively deal with controversial debates, like the nationalization of mines.”

Zuma, 69, is under pressure from labor unions, the ANC Youth League and the public to boost jobs in an economy where one in four people are without work. The National Treasury estimates gross domestic product needs to expand 7 percent a year, more than double this year’s expected rate, to cut the unemployment rate to 14 percent by 2020.

Smaller Decline

Reaction from investors to the political conflict has been mixed. The benchmark FTSE/JSE Africa All Share Index (JALSH) has dropped about 16 percent in the past year, when measured in dollars, less than a 19 percent decline in the MSCI Emerging Markets Index. (MXEF)

Gwede Mantashe, the ANC’s secretary-general, dismissed the notion that the cohesion of the ruling party or alliance was at risk, saying its signed-up membership had grown to more than 1 million from 621,000 in 2008.

“That is not an implosion, that is an expansion,” he said in a telephone interview from Johannesburg. “The organization is intact. It has normal organizational problems. You fight for maximum unity in any organization. No political party will not have its own dynamics and some factions that pull in one direction or another.”

Those factions were on display last month, when rival groups contested leadership posts in Malema’s home province of Limpopo. Cassel Mathale, an ally of the youth leader, was elected regional head of the ANC.

The ANC in Limpopo adopted a resolution to support nationalization of mines even though the party is still investigating whether it’s an option. Zuma told business leaders in October that nationalization is a debate within the ANC and not government policy.

Most in the World

London-based Anglo American Plc (AGL), Australia’s BHP Billiton Ltd. (BHP) and Xstrata Plc (XTA) of Zug, Switzerland, own mines in South Africa, the world’s biggest producer of platinum and chrome. Citigroup Inc. in April 2010 valued the country’s mineral resources at $2.5 trillion, the most of any nation.

The ANC is holding a rally it says will attract more than 100,000 people in Mangaung, in the central Free State Province, on Jan. 8, the date the party was created 100 years ago. The celebrations, including a gala dinner and a golf day, will be attended by 46 heads of state, including Zimbabwean President Robert Mugabe and Nigerian President Goodluck Jonathan. Zuma will outline the party’s policy priorities for the year in his keynote address.

The ANC’s predecessor, the South African Native National Convention, in 1912 united tribal chiefs, black leaders, churches and civil rights groups in a fight for the rights of the country’s black majority during white segregationist rule. The name was changed to ANC in 1923.

Apartheid Resistance

It mounted campaigns against laws that forced blacks from their land and compelled them to carry permits to enter areas reserved for whites. The ANC was banned in 1960 and began a campaign of sabotage against government targets the next year. Most of its leadership was arrested, including Mandela, who spent 27 years in prison, or went into exile.

Popular resistance to apartheid and economic sanctions forced the white government to the negotiating table and the ANC was legalized in 1990. It took power under Mandela four years later, winning 62.6 percent of the vote.

Party unity began to erode in December 2007, when Zuma won control of the party from Thabo Mbeki, Mandela’s successor, with backing from the unions and the Youth League. Mbeki was ousted as president of the country in 2008 after a court suggested he pressured prosecutors to pursue corruption charges against Zuma. A group of Mbeki’s allies, led by former ANC Chairman Mosiuoa Lekota, then quit the ANC to form the Congress of the People, which won 7.4 percent of the vote in 2009 elections.

“The ANC’s history has been completely eroded and been diminished in the eyes of many people,” Smuts Ngonyama, a COPE lawmaker and former head of the presidency in the ANC, said in a telephone interview from Johannesburg. “There is less tolerance of divergent views.”

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

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