Bloomberg News

South Africa’s ANC Looks to Ramaphosa to Rescue Economy

November 27, 2012

Former Labor Union Leader Turned Tycoon Cyril Ramaphosa

Cyril Ramaphosa won Zuma’s appreciation by heading the appeals panel that upheld the party’s expulsion of Julius Malema, the former leader of the youth league who backs Motlanthe as ANC leader. Photographer: City Press/Gallo Images/Getty Images

Cyril Ramaphosa, a former South African labor union leader turned tycoon, is gaining support to take a top leadership post in the ruling party to help rescue an economy plagued by strikes and credit-rating cuts.

Ramaphosa, 60, received overwhelming backing to replace Kgalema Motlanthe as vice president of the African National Congress from the eastern KwaZulu-Natal province, which has the most delegates at party elections next month. His selection would position him to succeed Jacob Zuma as president. Ramaphosa won’t yet say if he’ll stand for office at party elections next month, his spokesman Steyn Speed said by phone.

“Cyril Ramaphosa is appealing to business, to the labor movement, to the young people, to everybody,” said Celiwe Madlopha, chairwoman of the ANC’s Women’s League in KwaZulu- Natal. “He has the support. We really want to elevate him to the party leadership.”

Investor confidence in Africa’s economy has been battered by a series of violent strikes that have shut mines owned by Anglo American Platinum Ltd. (AMS), Lonmin Plc (LMI) and Gold Fields Ltd. (GFI) and spread to the transport and farming industries. The labor action and rising political risk contributed to Standard & Poors and Moody’s Investors Services lowering their ratings on South Africa’s sovereign debt.

The rand has plunged 8.3 percent this year, the second- worst performer of 16 major currencies tracked by Bloomberg. The unit advanced 0.4 percent to 8.8307 by 4:20 p.m. in Johannesburg trading.

Investor Confidence

Ramaphosa, South Africa’s second-richest black businessman after Patrice Motsepe, according to the Johannesburg-based Sunday Times, owns a stake in mines operated by Lonmin, the world’s third-biggest platinum producer, a coal-mining venture with Glencore International Plc (GLEN), and has the McDonald’s Corp. (MCD:US) franchise in South Africa. He’s also the chairman of MTN Group Ltd. (MTN), Africa’s biggest mobile-phone company, and Bidvest Group Ltd. (BVT), and sits on the board of SABMiller Plc (SAB) and Standard Bank Group Ltd.

His experience would give investors confidence that the ANC would be capable of turning the economy around, Paul Hansen, who manages 4.5 billion rand ($508 million) worth of assets as director of retail investing at Stanlib Asset Management, said in Nov. 14 phone interview from Johannesburg.

“It would be very positive internally and offshore,” he said. “It’s been very unusual for people in this country to go from business into public life. It’s a big advantage to have people in government who understand how business works.”

Parliamentary Domination

Africa’s oldest political movement controls almost two- thirds of the seats in Parliament, which elects the president, and its overwhelming majority faces no immediate threat. Under current ANC rules, its leader will also be its presidential candidate in national elections to be held in 2014.

What Motlanthe, the country’s current deputy president, decides to do at the Dec. 16-20 conference in the central city of Bloemfontein may determine Ramaphosa’s fate. While he hasn’t said if he will stand against Zuma for the party’s presidency, he’s made several speeches criticizing how the country is being run and has backing in several provinces.

“If Motlanthe decides to run, the Zuma camp wants Ramaphosa on his ticket,” William Gumede, a political analyst at the University of the Witwatersrand and author of “Restless Nation: Making Sense of Troubled Times,” said by phone from Johannesburg on Nov. 14. “That could open the way for Ramaphosa to re-enter politics.”

Provincial Nominations

In KwaZulu-Natal, Zuma’s home province, Ramaphosa won 841 votes for the ANC deputy leadership post to Motlanthe’s 16, Sihle Zikalala, the party’s provincial secretary said by phone yesterday. Provincial officials, who will account for 22 percent of the total at the ANC elections, unanimously nominated Zuma as party leader, he said.

The other eight provinces have yet to hold their nomination conferences.

The ANC Women’s League, which has 1 percent of the party vote, also nominated Zuma as party leader and Ramaphosa as his deputy, Angie Motshekga, the league’s president, told reporters in Johannesburg today.

Some top ANC leaders want to avoid a repeat of the divisive leadership struggle that occurred when Zuma ousted Thabo Mbeki in 2007. They’re trying to broker a compromise that would allow Zuma to remain party leader while relinquishing the nation’s presidency to Motlanthe in 2014, Gumede said.

Top Negotiator

Ramaphosa, who studied law, helped found the National Union of Mineworkers in 1982 and led the biggest-ever strike in South Africa’s gold industry five years later. He was the ANC’s top negotiator with the white-minority government when they reached agreement to end apartheid and hold South Africa’s first democratic elections in 1994. He also worked on crafting the nation’s constitution following the vote.

After Ramaphosa lost to former President Thabo Mbeki in the race to succeed Nelson Mandela, South Africa’s first post- apartheid president, he decided to enter the corporate world in 1996.

Ramaphosa still serves on the ANC’s 80-member national executive committee, one of its top decision-making structures, and is deputy head of the National Planning Commission, a government advisory body headed by former finance minister Trevor Manuel.

Ramaphosa’s business holdings and the shooting of striking workers at Lonmin’s Marikana platinum mine on Aug. 16 may have undermined his political support.

‘Dastardly Criminal’

Police killed 34 protesters at the mine northwest of Johannesburg on Aug. 16 following days of illegal and violent strike action. Ramaphosa called the strike “dastardly criminal” in an e-mail a day before shooting, and called for police to take “concomitant action,” the Johannesburg-based Times newspaper reported, citing evidence at a commission of inquiry looking into the killings.

“Over the years, since he left active politics to go to business his political star has waned,” Brutus Malada, a politics lecturer at the University of Pretoria, said in a Nov. 14 phone interview. “The recent events around Marikana may have somewhat dented his credibility.”

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net


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