The Race to Succeed South Africa’s Zuma Is On
Jacob Zuma, South Africa’s embattled president, still has two years left in his term, but for most business leaders, labor unionists, and even some of his own party’s most venerated leaders, he can’t go soon enough. The campaign to succeed him is already in full swing.
The contest will likely be decided in December, when the ruling African National Congress meets to choose a new leader, who’ll also be the party’s candidate in 2019 elections. The front-runners are Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, former chairwoman of the African Union Commission.
While Zuma is constitutionally barred from serving a third term, he has a vested interest in the succession race: He may be reliant on his replacement to shield him from graft charges that were dropped weeks before he became president in 2009 and which the main opposition party is fighting to have reinstated. He’s thrown his weight behind Dlamini-Zuma, his ex-wife and the mother of four of his more than 20 children. “Zuma’s own fate beyond 2017 hinges on who gets elected as ANC leader,” says Daryl Glaser, a politics professor at the University of the Witwatersrand in Johannesburg. “As long as he’s around, he’ll be in a position to influence who becomes his successor.”
Zuma, who joined the ANC in his youth and like Nelson Mandela served time in South Africa’s infamous Robben Island prison before rising through the party’s ranks, has been dogged by a succession of scandals, including a finding by the nation’s top court that he violated his oath of office by refusing to repay taxpayer money spent on a swimming pool and other upgrades to his private home. Discontent with his rule contributed in August 2016 to the ANC’s worst electoral performance since the end of apartheid in municipal elections. The party lost control of Pretoria, the capital, and Johannesburg, the country’s economic hub, though it retained a 62 percent majority in Parliament, which elects the president.
Anti-Zuma sentiment reached an apex after he fired his well-respected finance minister, Pravin Gordhan, on March 31, a decision that prompted S&P Global Ratings and Fitch Ratings Ltd. to cut South Africa’s credit rating to junk. Tens of thousands of people took to the streets to demand the president’s ouster, opposition parties filed a motion of no confidence in Parliament, and unionists who helped him win control of the ANC in 2007 booed him at a May Day rally. Former President Kgalema Motlanthe and Nobel laureate Archbishop Desmond Tutu were among those who called on him to quit. “Zuma has been sustained by a faction of the ANC that has created a business patronage network that protects him,” says Solly Mapaila, the second deputy general-secretary of the South African Communist Party, which is part of the ANC-led ruling coalition. “It is time we stand up to protect South Africa’s resources and not allow him to run away with them. He must go.”
Zuma, 75, denies wrongdoing, accuses his critics of trying to protect the interests of “white monopoly capital,” and says he’ll serve out his second term unless the ANC decides otherwise. While the party’s executive committee has backed him so far, an increasing number of its members have been speaking out against him.
Dlamini-Zuma, 68, remains on good terms with Zuma, whom she divorced in 1998. A medical doctor by training, she’s served as minister of health and minister of home affairs, among other posts. Despite those qualifications, her close ties to Zuma mean she risks being seen as his proxy, says Mcebisi Ndletyana, an associate professor of political science at the University of Johannesburg. Campaigning for the ANC’s top job, Dlamini-Zuma has supported Zuma’s call for “radical economic transformation” and land redistribution to address the racial inequality that persists 23 years after apartheid’s end. In addition to the president’s backing, she has the endorsement of the ANC’s women’s league and the premiers of three rural provinces.
Ramaphosa, 64, whom Zuma appointed deputy president in 2014, publicly disagreed with his boss for the first time after Gordhan was unilaterally fired. On the campaign trail, he’s been speaking out against corruption and has won the backing of the 1.8 million-member Congress of South African Trade Unions and ANC leaders in Northern Cape province.
A lawyer, Ramaphosa helped negotiate a peaceful end to apartheid and draft South Africa’s first democratic constitution. After losing to Thabo Mbeki in the contest to succeed Mandela as president in 1999, he started an investment company, amassing a fortune before returning to politics in 2012 as the ANC’s deputy leader.
A Bloomberg survey of 26 analysts in February showed that the succession race was too close to call. A victory for Dlamini-Zuma would bode ill for investor confidence, warns Ian Bremmer, president of Eurasia Group, a global risk advisory firm. “Ramaphosa is the only person out there who reflects a desire to get towards sustainable economic development and working with the business community,” he says.
Uncertainty about Zuma’s leadership and who will succeed him is weighing on the economy. The International Monetary Fund projects growth of 1 percent this year, an improvement on last year’s 0.3 percent, but still well short of the more than 5 percent the government is targeting to address a 26.5 percent unemployment rate.
Investor unease with the country’s trajectory has only been partially reflected in the financial markets. Foreign portfolio managers dumped a net 55.4 billion rand ($4.3 billion) in South African equities from the start of the year to May 23, while purchasing 37.8 billion rand in bonds. The rand was up 5 percent against the dollar over the period. “The resilience of rand assets thus far is a testament to the lack of attractive alternative investments, rather than affirmation of Zuma’s stewardship of the country,” says Phoenix Kalen, director of emerging-markets strategy at Société Générale SA. “Investors will look for more market-friendly credentials in a successor.”
Saif Malik, Standard Chartered Plc’s global head of banking for Africa, is unperturbed by the messy politics. “Many parts of the underlying economy are still quite robust,” he says. “I think it’s too soon to say suddenly everything has fallen off a cliff.”
The country’s competitive advantages include Africa’s best transport links and energy supply, a financial system the Geneva-based World Economic Forum ranks among the world’s best, and a trove of untapped minerals. The country also consistently ranks as Africa’s top destination for foreign direct investment in an annual survey conducted by accounting firm EY. Last year, Beijing Automotive International Corp., a Chinese state-owned carmaker, agreed to build an $829 million plant, the biggest auto-manufacturing project in South Africa in four decades.
Jeff Radebe, the ANC’s head of policy, expects the political noise to quiet down after the December party conference and says the government remains committed to working with business and reattaining an investment-grade credit rating.
Gordhan, the former finance minister, warns that there needs to be better alignment between politics and economics if the country is to set itself back on the right path. “We must make tough leadership choices,” he says, “and give the country the direction that it requires.”
—With David Malingha Doya and Paul Vecchiatto
The bottom line: The contest for leadership of the ANC pits a business-savvy deputy president against President Zuma’s ex-wife.