Johannesburg - The ANC kicked its youth league leader Julius Malema out of the party for five years on Thursday after finding him guilty of sowing division.
The ANC's decision dealt a major blow to the political career of the outspoken ANC Youth League (ANCYL) leader and his push to nationalise mines in the world’s biggest platinum producer.
South African stocks extended gains after news of the suspension of Malema, who has unnerved investors with his drive to nationalise mines. The rand also firmed slightly after the announcenment.
Derek Hanekom, head of the ANC disciplinary panel, said Malema had been found guilty of sowing serious divisions in the party and of bringing the 99-year-old liberation movement into disrepute.
Suspension of Malema should also help pave the way for President Jacob Zuma to secure a second term as ANC leader - and hence the country’s president - at a party conference in a year.
But the unexpectedly harsh sentence imposed on Malema, a significant power broker in the ANC, could provoke an anti-Zuma backlash.
ANC insiders say Malema is part of a plot to replace Zuma with a leader more sympathetic to the ANCYL's desire to nationalise the mines and seize white-owned farms for redistribution to landless blacks.
The party said Malema had the right to appeal to the ANC disciplinary body and any appeal had to be lodged within 14 days. He can also appeal the outcome to the ANC’s National Executive Committee - headed by Zuma.
Malema was writing a university exam on Thursday and was not immediately available for commment.
Said Christie Viljoen, economist at NKC Independent Economist: "Whatever they do with Malema, the big issues he has raised and what he represents won’t go away. The poverty, the inequalities and the unemployment continue.
"He’s not necessarily going to lie down, he’s going to continue being vocal and somebody else will probably step up to take his place at the youth league.
"We will have to see if there's an appeal; who knows what could happen. I can’t see he is going to be quiet.
"The problem now is that he motivated himself as somebody who stands for the poor and now the ruling party is saying: we don’t like you any more so the issue of poverty will be raised more and more."
Political commentator on eNews Channel Karima Brown said: "Julius Malema has lost the presidency of the ANCYL. That is the most important ramification of what (disciplinary hearing chairperson) Derek Hanekom has just said.
"The larger story is that the youth league leadership is in crisis.
"Mr Malema has had a date with history today and he is finished in the ANC and ANCYL."
Independent political analyst Nic Borain said: "This is obviously good for the ANC - for its image, for its internal coherence and for the reputation of its leadership.
"The loutish and grandiose behaviour of the ANC Youth League and the individual leaders’ involvement in looting the public sector behind a facade of representing the interest of the poorest and most marginalised has deeply damaged the reputation and core values of the ANC.
“Much will depend on whether the leadership has the stomach and spine to follow the disciplinary process with a thorough implementation of the sentence throughout all forums of the organisation. We shouldn’t forget that important individuals and constituencies have backed Malema through this process.
“Will the sentence provoke a backlash, attempting to build opposition by portraying Malema as a victim? It is obviously possible, but most observers are hoping that the grave tones and thorough approach of the ANC Disciplinary Committee might presage a process of repair and renewal in the ruling party.”
Said Anne Fruhauf, Africa analyst at Eurasia Group: “The ruling doesn’t directly tackle the nationalisation issue. But it will be viewed as a signal that the most vocal proponent of nationalisation has been cut down to size.
"The youth league doesn’t dictate policy, but Malema's tireless lobbying within the party and on the streets has caused great anxiety among investors.
“In our view, the nationalisation debate will become a little more muted if Malema’s influence wanes. But one thing is clear: nationalisation is not off the agenda and will feature at the ANC’s 2012 policy conference.
“We still don’t expect the ANC to endorse anything like the youth league’s demand for 60% state equity and constitutional amendments to expropriation clauses. But there seems to be clear consensus around the need for more redistribution.
“This won’t be a worst-case outcome, but this is not good news for investors, because many already consider the current policy regime to be onerous.
“The succession battles have been so bitter that they will leave the ANC even more divided. The run-up to Mangaung won’t be plain sailing for Zuma, especially if Malema can drag out the looming appeal against his sentence and refuses to relinquish his leadership of the youth league.”