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Cape Town – The rand strengthened by as much as 2% on Sunday despite reports revealed that Jacob Zuma won the fight to remain South Africa’s president, after the African National Congress’s (ANC) National Executive Council (NEC) debated a proposal to recommend his removal from office.
MONDAY MORNING UPDATE: Zuma political survival has boomerang effect on rand
The rand gained as much as 20c against the dollar since trading closed on Friday, trading at R12.66 to the dollar by 21:30, half an hour after trading resumed. By 23:05, the rand had edged back up to R12.73 to the greenback.
According to News24 and Bloomberg, Zuma survived the bid to order his removal from office. News24 sources confirmed that Zuma had won the vote, with only 18 NEC members speaking out against the president.
The ANC is expected to hold a press briefing at 14:00 on Monday, at which the decisions of the NEC will be publicly shared.
BREAKING: Zuma survives bruising ANC NEC meeting
The committee decided on Sunday not to vote on a no-confidence motion in the president, two committee members told Bloomberg. They asked not to be named because they aren’t authorised to speak publicly on the matter. Pressure had built on Zuma to quit following his March 31 decision to fire Pravin Gordhan as finance minister in a cabinet reshuffle, a move that sparked public protests and cost the country its investment grade credit rating.
The committee’s decision will probably increase the chances that Zuma, 75, will survive a no-confidence motion called by opposition parties in parliament, whether or not the Constitutional Court orders a secret ballot for the vote. ANC lawmakers occupy 62% of the 400 seats in the National Assembly.
“Despite all the pressures on Zuma and his government, his power base remains firmly intact,” Melanie Verwoerd, an independent political analyst and former ruling party lawmaker, said by phone from Cape Town.
GRAPH: Intraday movements in rand/dollar currency from Friday to Sunday (Source: Bloomberg)
Divisions in the party have widened since the ANC suffered its worst-ever electoral result when it lost control of Johannesburg and Pretoria in a municipal vote in August.
Deputy President Cyril Ramaphosa, who’s a rival to Zuma’s ex-wife to succeed him as party leader in December, said on May 21 that South Africa is threatened with becoming a “mafia state.” Zuma’s presidential term ends in 2019.
A study by eight leading academics from four of the nation’s top universities released last week found that Zuma and his allies, including members of the Gupta family who are in business with his son, had carried out “a silent coup” that had enabled them to raid state assets and reap billions of rand from government contracts. Zuma and the Guptas have previously denied such allegations.
“Zuma surviving is not a surprise, but it appears to have been close,” said Peter Attard Montalto, an economist at Nomura International in London. “I still see him staying in his post until the first half of 2018.”
GRAPH: Daily movements in rand/dollar currency from March to May 2017 (Source: Bloomberg)
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