Cape Town - What the media is portaying as a “Zuma vs Gordhan” battle is in actual fact the 'tenderpreneurs' vs the rest, Nomura emerging markets economist Peter Attard Montalto said on Monday.
READ: Uncertainty rules in SA, says Nomura economist
"This distinction is key because both Jacob Zuma and Pravin Gordhan are dispensable from their current positions in order to secure the success of either side," said Montalto. It seems as if all sides are pondering a post-Zuma succession and how their cause can derive the greatest benefit from this, "both the tenderpreneurs as a route to future electoral success and the rest of the ANC as a route to better policy leadership for the country".
Montalto pointed out that the ultimate decision will be taken by the ANC's National Executive Committee (NEC), although it seems that MPs are shifting allegiances and becoming more reluctant to back President Zuma.
"For now it looks more certain they will decide for the primacy of the tenderpreneur camp, but as we said above, this does not mean President Zuma will survive. The market needs to consider that 'Zumxit', as we term it, is not necessarily a positive if the status quo continues and it is done in order to facilitate that lack of real change," said Montalto.
Forecasting how it will all end is impossible, "in part because the narrative is path-dependent, but also because the tenderpreneurs' battle is being forced below the surface, in private and largely out of the media spotlight", said Montalto.
In the meantime, the ANC is bringing the battle out into the public domain. While one side seems prepared to 'fight dirty', the other seems more willing to make use of legal avenues.
"We think now that the tenderpreneur side may well win the political, subterranean battle. But we also are more convinced that an ever-increasing deluge of legal cases, market reaction and institutional strength means that this faction may well win the public battle – or what might be termed the legal and institutional battle," said Montalto.
It is "neither obvious nor a done deal that either side will win, particularly before 2017. The electoral conference will be the eventual confirmation of what has happened – of who has won," said Montalto.
And while all this is going on, markets should be aware that the situation is complex, that only half the battle is visible and that media reports may be only a partial portrayal of the picture.