December 20, 2017
Cyril Ramaphosa wins ANC presidency
A decisive battle won, but the war continues…
South Africans and the ZAR breathed a huge sigh of relief on the election of Cyril Ramaphosa as the new President of the ANC. Our prior words of caution however rang true as the rest of the Top 6 results unmasked a polarised Executive.
Of the Top 6 decision makers in the ANC; Deputy President – David Mabuza, Secretary General – Ace Magashule and his Deputy SG – Jesse Duarte are all deeply entrenched members of Zuma’s patronage network. While the result is far from ideal it could have been a whole lot worse as the focus now shifts to the NEC, which is expected to take the same compromised form as the Top 6, rendering a stalemate in the quest to recall Zuma. At the time of writing the results of the SG votes are being contested, moreover replacing Magashule with Senzo Mchunu will give Ramaphosa the power he needs to act decisively. Zuma will be much tougher to unseat as State President with a divided Top 6 and NEC, however the high court has given Ramaphosa – in his capacity as State DP the mandate to appoint the new National Director of Public Prosecutions to replace the amoeba that is Shaun Abrahams. Couple this with the State Capture enquiry and Magashule could find himself in prison instead of SG of the ANC.
As things stand, what does all this mean for the ZAR? Worst case scenario from here is a toothless Ramaphosa and Zuma presidency until 2019 in which case we urge clients take advantage of the ZAR at current levels. Best case scenario is a re-run of the SG vote, Mchunu tips the balance of power toward Ramaphosa and Zuma is recalled before the new year – At which point the ZAR could test 12.50, with significant long term benefits for ratings and all things Macro. Again, we wait with great anticipation..