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Cape Town - President Jacob Zuma will leave office but on the ANC's terms after a defeat of impeachment vote and after local elections, said emerging markets economist Peter Attard Montalto.
"The markets have gotten overexcited about the chances of President Jacob Zuma leaving this week. 'Should' is not the same as 'will' in SA politics," he told Fin24 following Zuma's televised address to the nation on Friday night.
"As expected Zuma has not resigned. We are in the 'sorry' scenario though we still need to watch an emergency NEC [National Executive Committee]. I think Zumxit [recall] will happen but on the ANC's terms," he said.
Montalto said the ANC backing Zuma and trying to spin the ConCourt judgment as less bad than people think, will disappoint markets.
“The set up of the extended NWC meeting also seems to make a short term recall very unlikely next week and markets again will be disappointed. The ZAR should weaken,” he said.
The rand strengthened to R14.60/$ shortly before Zuma's announcement and moved in a narrow band up to R14.68 during his address. By 19:48 the currency was trading at R14.71 to the greenback.
The rand lost further ground against the greenback after ANC secretary general Gwede Mantashe admitted that acting against the president would tear the ANC apart. By 20:31 the rand traded at R14.75/$.
“Now they are caught between a rock and a hard place by keeping him on,” said Silke.
He said the ANC will have to face the music in the local polls with a tainted president. "Ultimately, the voice of the electorate may be the final arbiter.
"Zuma’s flawed attempt at a contrite apology doesn’t help himself, his own party or South Africa - but it will help the opposition."
Silke said opposition parties should breathe a sigh of relief in the ammunition that Zuma provided them as a result of tonight’s address.
"Zuma has attempted a very heavy-handed face-saving exercise in [his] address but the political backfiring of this will be seen in months to come."
Zuma’s address, believes Silke, will serve to polarise both the ANC and South Africans. He said this in itself can destabilise governance in the country.
"By clinging onto power, Zuma opens the door for popular protests against his leadership both within and outside parliament."
Silke said the president's address will create divisions within the ANC as his defence will be seen as preserving his own power rather than being accountable.
He cautioned that the ANC opting to retain "the ‘damaged goods’ of President Zuma" is a risky strategy ahead of looming local polls.
