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It’s been a difficult few months for Zuma but will ANC chief Ramaphosa now recall him? [Xinhua]
Unlike the recall of former President Thabo Mbeki however, South Africa does not have the luxury of waiting ten months, as Moody’s Investors Service gave the South Africa government 90 days starting in late November to put things right.
As it is the constitutional right of the president of the country, not the president of the ANC, to appoint the cabinet, the removal or resignation of Zuma as President is the sine qua none for progress in addressing Moody’s concerns. Constitutionally, Zuma can stay President until May 2019 when his five-year term of office ends, unless he is recalled or loses a vote of no confidence in Parliament.
Radio commentator Chris Gibbons told The BRICS Post that it was too early to tell what the impact of a Ramaphosa Presidency would be on South Africa, although he noted that financial markets had taken a very positive view of his election victory.
“It’s far too early to tell what the Ramaphosa victory means, particularly because of the ‘hung’ nature of the ANC’s Top Six. With three known Zuma loyalists in key positions – two of whom have been accused of serious wrongdoing – the new ANC President could well have his hands tied,” Gibbons said.
We’ll know soon enough which way the wind is going to blow whether or not Ramaphosa can effect the recall or resignation of Zuma.
“If he can achieve that before February’s State of the Nation speech, along with the installation of a new finance minister, South Africa will be pointing in the right direction. If not, well, we can expect further ratings downgrades, a much weaker rand and further deterioration in the economy,” Gibbons added.
Former Finance Minister Pravin Gordhan, fired by President Jacob Zuma in March 2017 after being hastily returned to his former position in December 2015 following the firing of Finance Minister Nhlanhla Nene, was a vocal supporter of Ramaphosa’s campaign to be ANC president. He welcomed Ramaphosa’s victory and said it would create a season of hope.
His response was echoed by a range of business associations, which said they were committed to working with Ramaphosa to build the economy and avoid a further ratings downgrade.
The South African Chamber of Commerce and Industry welcomed the outcome of the elections of the office-bearers of the ANC.
“As the ruling party we also congratulate the ANC for the display of a peaceful, mature democratic process which bodes well and cements the concept of transparent democratic contestation and processes in the choosing of political leaders in South Africa. The challenges we face in the area of fiscal consolidation, unemployment, the current high debt to GDP ratio, and the sovereign credit ratings downgrades are matters that require visionary leadership and urgent drastic action to be taken,” the industry body said.
Janine Hills, the founder of Vuma Reputation Management, said Ramaphosa’s victory would boost South Africa’s standing in the world after the Zuma years.
“Cyril Ramaphosa’s victory is definitely a step in the right direction for the country. At a time when the country needs to find its moral compass and for our leaders to do the right thing, a man who has been so vocal and critical about the high level of corruption in the country is a cut above the rest,” she told The BRICS Post.
Most expect that this victory will restore international investors’ faith in South Africa and will give the economy the boost it needs to compete globally.
“I believe that the newly elected president will bring transparency and ethical practices to the office and I look forward to the growth this will bring to our country,” Hills said.
Economist Ian Cruickshank from the South African Institute of Race Relations was concerned that the split in the Top Six ANC posts between Zuma supporters and Ramaphosa supporters would hamper policy making.
“The one thing that financial markets hate the most is uncertainty. If we do not progress on this then I fear that instead of seeing a monetary policy easing next year, we could see instead a raising of interest rates to protect the rand as foreigners take their money to a country where there is policy certainty,” he told The BRICS Post.
Cruickshanks’ views were echoed by Mike Schussler from economists.co.za.
“South Africa needs to have the stability of policy in mining; agriculture and of course fiscal policy. Mr Zuma left Mr Ramaphosa a lot of problems here, and a downgrade from Moody’s is still likely. This is where Mr Ramaphosa can make the biggest difference by changing the state-owned enterprises boards and management, and prudent Fiscal policies will make a big difference to bailouts and finances. South Africa needs him to stabilise the system quickly,” Schussler told The BRICS Post.
Ryk de Klerk, the co-founder and consultant of PlexCrown Fund Ratings told The BRICS Post that Ramaphosa’s victory was undoubtedly a victory for all South Africans and, more importantly, realism. It was therefore a major turning point.
“Confidence was undermined by the uncertainties regarding political leadership, state-owned enterprises and fiscal discipline. Ramaphosa’s stance on corruption and the respect that he has from virtually all business leaders both in South Africa and in the rest of the world would normalise business confidence from the current depressed levels,” he said.
Nelson Mandela University Business School Professor Chris Adendorff was equally optimistic when he spoke to The BRICS Post.
“All in all I am very excited about what lies ahead and we will shortly see a surge of new investors and countries ready to assist South Africa out of deep waters”, he said.
Helmo Preuss in Grahamstown, South Africa for The BRICS Post
