Bloomberg News

Zuma’s Next Battle Is Voter Trust After Winning ANC Post

December 19, 2012

South African President Jacob Zuma, having scored a resounding win in ruling party elections, now faces the tougher task of restoring voter trust amid mounting discontent over poverty and unemployment.

Zuma, 70, fended off a challenge by his deputy Kgalema Motlanthe for the top post at the African National Congress, winning 75 percent of votes from delegates at a conference in the central city of Bloemfontein. That will make him the ANC’s presidential candidate in national elections scheduled for 2014.

“Jacob Zuma knows he’s got the conference in the bag,” William Gumede, a political analyst at the University of the Witwatersrand, said in a phone interview from Johannesburg. “He doesn’t know if he’s got the country in the bag for 2014.”

The ANC has ruled South Africa’s largest economy since taking power under Nelson Mandela in 1994, and commands almost two-thirds of the seats in parliament. Zuma’s government has struggled to contain a 26 percent jobless rate, rising protests from poor shantytown residents against a lack of housing, water and other services, and a wave of violent strikes since August.

Eighteen years after the end of apartheid, almost 1.9 million black households had no income at all, while white households on average earn six times more than their black counterparts, according to data from the national census. South Africa had a record 113 township protests in the first seven months of the year, according to Johannesburg-based research group Municipal IQ.

Election Support

“Our strength has grown in numbers, but our influence has declined,” Ben Turok, an ANC lawmaker since 1995, said in an interview in Bloemfontein. “If you look at voting patterns, it’s true.”

While the ANC dominates, its support dropped to 62 percent in municipal elections in 2011 from 66 percent in the national vote two years earlier. The opposition Democratic Alliance boosted its share to 23.9 percent from 16.6 percent.

“We remain doubtful that Zuma can oversee the reforms needed to pull the South African economy out of its current rut,” Shilan Shah, Africa economist at Capital Economics Ltd. in London, said in an e-mail. “This is unlikely to prevent Zuma’s re-election as president in 2014, but a moribund economy may weaken the ANC’s stranglehold over top-level politics in South Africa beyond this.”

Investors’ perception of risk in South Africa has increased this year. The cost of protecting South African government debt against non-payment using credit default swaps over five years has jumped 13 basis points since the start of mining strikes on Aug. 10.

Ramaphosa Win

The rand has dropped 4.6 percent against the dollar during the same period, the second-worst performer of the 16 major currencies tracked by Bloomberg. The currency fell 0.4 percent to 8.4788 per dollar by 3 p.m. in Johannesburg.

“Government services are exceedingly uneven,” Trevor Manuel, minister in the Presidency and head of the National Planning Commission, told business executives and reporters in Bloemfontein today. “You go into some government departments where you feel like you’re in a modern economy, the service feels good, the environment is good, the people are cheerful. And then you go to other parts of government where you could be living in Dickensian periods.”

Nationalize Mines

The election of Cyril Ramaphosa, the second-wealthiest black South African according to the Johannesburg-based Sunday Times, to the post of ANC deputy president yesterday may help to bolster Zuma’s position and ease investor concerns. Ramaphosa won 76 percent support in a three-way contest for the No. 2 party post.

“Ramaphosa’s re-entry into senior ANC politics will elicit a sign of relief among investors, who view him as pragmatic and business-minded,” Mark Rosenberg, an analyst at Eurasia Group in New York, said in an e-mail. “He is also seen as a counterweight to Zuma’s indecisiveness and reliance on patronage-based politics.”

Ramaphosa served as ANC secretary-general and helped negotiate the end of white segregationist rule before quitting politics for business in 1996. He owns a stake in mines operated by Lonmin Plc (LMI), 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.

The new ANC leadership will be faced with calls from the ANC Youth League to nationalize mines and a push from members to do more to combat unemployment and poverty. While Zuma secured a resounding victory over Motlanthe, he will still need to win over his detractors in the party.

“One of the things the ANC has a great capacity for is self-correction,” Jessie Duarte, who was elected the deputy secretary general unopposed said yesterday. “With the elections ahead of us in 2014, our members will unite.”

To contact the reporters on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net; Franz Wild in Johannesburg at fwild@bloomberg.net; Mike Cohen in Cape Town at mcohen21@bloomberg.net

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


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • MCD
    (McDonald's Corp)
    • $93.72 USD
    • -0.42
    • -0.45%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus