'Rand could be vulnerable'

This is the view of Investment Solutions chief economist, Chris Hart, who was speaking against the backdrop of news at the weekend that the ANC had forced President Thabo Mbeki to bow out of office prior to the end of his term.

"We have a major risk event here. The major question is whether we have a genuine risk aversion trade in the context of the current account deficit," he said.

However, he adds it is not necessary to get too melodramatic just yet.

"This could have been discounted - it was telegraphed and was therefore not a major surprise - so let's not be too melodramatic," he said.

Hart feels the weekend's events do create political risks as there will be a desperate fight for jobs within the organisation and there are still severe law and order problems, with a perception by some that the rule of law has been compromised.

"This is a milestone in the battle for the ANC, but it is not an end point, for example, at the ward level you have it wrenched from them. There will be a desperate fight for jobs from that point of view."

"The fight isn't over," said Hart, adding that there could be violence when it came to the job security of councillors, for example.

"It is a victory for democracy, but a tainted victory as there is a mob element to this," said Hart.

"But it does show no politician is above the grass roots - one thing to take out of this is we don't have the African syndrome of one ruler forever and forever," he added.

Hart is concerned about the weak law and order position that persists in the country, a factor he notes that led to the end-game for Zimbabwe's economy.

According to some media reports at the weekend, there is now the possibility of an opposition party arising from within the ANC after the dramatic events of the weekend.

- I-Net Bridge