What's next for the ANC?

THE CANDIDATES

The anti-Zuma camp remain loyal to the party that brought the country majority rule, but seek to curb a system of presidential patronage that has corrupted state institutions and weakened government finances. This has undermined investment in the continent’s most developed economy and triggered downgrades from the major credit rating agencies. Their most admired advocate is the former finance minister, Pravin Gordhan, who backs the leadership challenge of South Africa’s deputy president Cyril Ramaphosa. This former trade union leader was Nelson Mandela’s favoured candidate to succeed him in the 1990s. Having lost out to Thabo Mbeki, Ramaphosa went into business. Despite his considerable wealth and having served as Zuma’s deputy, he retains the support of many of the party rank and file. He is also the favoured choice of the business community at home and abroad.

Meanwhile, Zuma and his supporters back former cabinet minister and chairwoman of the African Union Nkosazanana Dlamini-Zuma. Although divorced from Zuma, she is regarded as loyal to the president and opposed to calls for reform or prosecution of senior officials. The President is openly accused of theft and corruption in parliament and in the media, most recently over his connection to the Gupta brothers, Indian-born businessmen and the alleged ‘state capture’ of state institutions to for personal enrichment. He needs a loyal successor to lead the party while he remains in power and to protect him after his second and final term of office has ended. Zuma is a formidable party infighter and the contest is expected to be close. 

A bid by Zweli Mkhize, the ANC’s Treasurer General, to run as a third candidate that might have bridged the divide between Dlamini-Zuma and Ramaphosa has faded after disappointing early soundings from the local and provincial branches, whose 4,723 delegates will vote for the leader and the party’s other five top positions in the party at the elective conference. Cabinet minister Lindiwe Sisulu, an early presidential hopeful, is in the running to become ANC deputy president, although Ramaphosa prefers another female minister, Naledi Pandor, as his deputy.

PROVINCIAL LINE-UP 

Zuma’s key support base in KwaZulu Natal has the most delegates, and reportedly backs Dlamini-Zuma, along with two other rural provinces, Free State and North West, and the party’s Youth, Veterans and Women’s Leagues, each of which has delegates. The provinces with the largest cities and commercial hubs - Western Cape, Eastern Cape and Gauteng - are reported to be solidly behind Ramaphosa. At the time of writing, Ramaphosa is believed to have a narrow lead. 

The winner will be the first ANC leader facing possible defeat at the next general election. The ANC’s national majority is in gradual decline and it will probably have to stand in the 2019 presidential, parliamentary and provincial polls without its Tripartite Alliance with the Congress of South African Trade Unions and the South African Communist Party. In provincial elections, the ANC has already lost Western Cape to the Democratic Alliance (DA), South Africa’s main opposition party. At last year’s municipal polls it lost control of all the country’s major cities as the DA and the populist Economic Freedom Fighters (EFF) gained ground. However, the DA will face a tough battle to win over support from the ANC’s core voters if it is to attempt to break the party’s stranglehold on the presidency. 

CORRUPTION, THE BIG ISSUE 

Corruption has overtaken racial inequality, unemployment and crime as the main political issue, especially in urban South Africa. This follows a wave of government scandals, most of them directly or indirectly linked to President Zuma and categorised as “state capture”. An investigation by Thuli Madonsela, until recently Public Protector, into the funding of Zuma’s private home concluded that he had acted unconstitutionally. Her next report found that the Gupta family had taken effective control of key government departments and parastatal companies for their own commercial advantage by manipulating the ministers and executives in charge. The President is close to the Guptas and his son and nephew have been their business partners or employees. This year’s surge of emails released by unknown whistle-blowers and dubbed the “Gupta Leaks” revealed more evidence that shocked the public about the influence of the Guptas’ businesses over government procurement and other key decisions. After the major banks refused to handle the Guptas’ business, the family hired Bell Pottinger to discredit their and the governments’ opponents in a racially charged campaign that backfired so badly that it led to the demise of the British public relations firm.

Other international companies implicated in the leaks include global auditing firm KPMG who overlooked or helped to cover up suspicious transactions and were hired by the government to investigate an alleged “rogue unit” in South Africa’s Revenue Service (SARS), the tax department. Under Pravin Gordhan and his successor Ivan Pillay, SARS pursued politically-connected criminals and businessmen and senior officials, including Zuma, for non-payment of tax. As a result of its conduct, KPMG’s local management has been dismissed and the firm has lost its major South African clients. SAP, the German software giant, has also replaced its local management and has reported alleged misconduct to the authorities in the United States, where it has a listing. SAP reportedly paid a 10-percent sales commission to a Guptacontrolled company to secure contracts with rail and ports operator Transnet and power utility Eskom. Meanwhile, management consultants McKinsey & Co have only admitted to “errors of judgement” in working alongside another Gupta-linked company seeking business from Eskom.

THE ECONOMY 

Investment and economic growth have been poor since Zuma became President in 2009. Key sectors such as mining and infrastructure have suffered from confused or harmful regulation. Even greater damage to the economy followed the dismissal in quick succession of two respected finance ministers, Nhlanhla Nene and Pravin Gordhan, both of whom insisted on sound revenue collection and a tight rein on spending. Gordhan’s replacement by a Zuma loyalist, the inexperienced Malusi Gigaba, early this year resulted in an immediate downgrade of South Africa’s credit rating to junk status by the major agencies. Announcing a further downgrade in November, S&P Global said that “unclear and shifting policy objectives, political manoeuvring and frequent changes of leadership in key ministries, and concerns over the pressures on the key policymaking institutions such as the Reserve Bank and the National Treasury, have weakened South Africa’s economy, finances and institutions.” The decline in public finances might pose the greatest threat to the ANC’s future prospects. Among the few governments in Africa with a functioning welfare state, South Africa will no longer be able to count on its core supporters if it cannot afford the social grants and other services on which many of them rely. Supporters of Ramaphosa believe it is not too late to turn the economy around.