Africa News blog
African business, politics and lifestyle
It would be hard for the leaders of South Africa’s COPE party to put a positive spin on its latest poll rating of just over 2 percent. If the breakaway group from the African National Congress gave the ANC a bit of a jolt before elections in April, the ruling party doesn’t seem to have much to worry about from that quarter now.
In terms of electoral success, it hasn’t been a good year for parties trying to challenge the former liberation movements that run most of southern Africa.
In Namibia, a breakaway group from the ruling SWAPO party emerged as the main opposition, but still only won just over 11 percent of the vote and complained of foul play. In Mozambique, Frelimo won another resounding victory, beating both old rival Renamo and the new MDM – which complained at the barring of some of its candidates.
Angola’s President Jose Eduardo dos Santos signalled to his MPLA party that he would wait another three years before a presidential election he is almost certain to win.
South Africa’s largest trade union federation was quick to break into stirring songs of class struggle during its recent congress and COSATU members showed an impressive ability to sign along in unison.
But the question of what it is fighting for these days and its role in the ruling tripartite alliance with the African National Congress and the South African Communist Party has never been under such great scrutiny as it has since President Jacob Zuma took office in May.
Recent events in South Africa have sent some conflicting signals to investors about sovereign risks. On the one hand there was some regulatory flip-flopping over the Vodacom listing given objections from the union organisation COSATU, which raised questions about the influence of unions in Jacob Zuma’s administration. On the other hand the sovereign issuing some $1.5 billion was highly successful and oversubscribed.
With Zuma recently elected on a platform of change for his domestic audience and continuation of old policies when speaking to investors, there is a raft of new ministers and new ministries and quite a bit of policy uncertainty. No foreign investor will deny South Africa’s need to address serious social problems of inequality, housing, jobs and education through a more developmental state agenda.
The attempt to sink the $10 billion bourse debut of Vodacom, which went ahead on Monday after an 11th-hour court ruling, hurt the rand currency and revived investor concerns over Zuma.
South Africans have widely greeted new President Kgalema Motlanthe, many of them with a sense of relief after the bitter and divisive power struggle between his ousted predecessor Thabo Mbeki and Jacob Zuma, leader of the ruling African National Congress.
Motlanthe, quiet spoken and dignified, struck exactly the note the public were looking for when he took office, sober but smiling gently – a huge contrast to the theatrical ebullience of Zuma and the aloof, intellectual style of Mbeki, who was seen as arrogant and out of touch with his people.
Jacob Zuma, the embattled leader of South Africa’s ruling African National Congress (ANC) launched a big fight for his political life on Aug. 4, asking the Pietermaritzburg High Court to dismiss a graft case against him that could stop him becoming president next year. If his application is rejected, a full corruption trial could follow later this year and South Africa could head into a protracted period of tension and uncertainty. Read the following insights from leading analysts and have your say on how the legal process could affect South Africa:
Keith Gottschalk, the University of the Western Cape (see full analysis)
“Jacob Zuma’s Zuma’s legal team has already proved, year after year that, if you have a bottomless pocket such as taxpayers, you can protract litigation, U.S.-style for the better part of a decade.”
Adenaan Hadien, Cadiz Holdings
Pietermaritzburg may well have been brought to a standstill with the resumed corruption case of Jacob Zuma in the High Court, but I suspect the same would not be true for local markets. Certainly, if last week’s market performances are anything to go by, then reactions are likely to be muted. Last Thursday, the Constitutional Court dismissed all four of Zuma’s appeals to prevent the state from using potentially damaging evidence against him in his corruption trial. On Monday, Zuma’s legal team submitted an application for a permanent stay of prosecution, arguing that his constitutional rights have been violated. This application and the round of appeals which may follow if, as is expected, it was rejected, would again delay things.
On the week, the local currency gained over 4% against South Africa’s trading partners’ currencies and bonds enjoyed gains last seen in the late-1990s. Equities put in a more mixed performance on the week, due to the oscillating woes of resources against financials and industrials. The performances of bonds were even more impressive, given the higher-than-expected consumer inflation figures released on Wednesday. Granted, Thursday’s producer inflation numbers were more encouraging.
Raenette Taljaard, Helen Suzman Foundation
ANC President Jacob Zuma’s quest for a pre-trial stay of prosecution looks certain to perpetuate uncertainty and an uncomfortable ongoing holding pattern and turmoil inherent in these dramatic events.
These compounded uncertainties do not only affect the South African economy with perceptions of political risk ratcheting up as key members of the new ANC leadership step up the rhetoric as Zuma goes to court but also creates tremors for core constitutional institutions and the bench in South Africa. After upholding the search and seizure warrants used against Zuma and rebuking his legal team for what amounts to delaying tactics, the Court also discouraged pre-trial legal wrangles of the kind that started in Pietermaritzburg.
Keith Gottschalk, The University of the Western Cape
The Presidency currently has a line item budget of 10 million rand per year for Zuma’s legal expenses. By South African standards, this is a record. It will certainly enable his legal team to appeal every point of procedure, then if necessary the verdict, and sentence. Each appeal starts with a delay of six or nine months on the court rolls, repeated as it winds it way upwards through a full bench of the High Court, followed by the Supreme Court of Appeal, followed by the Constitutional Court.