Investors, analysts, economists and politicians are all reacting to the ANC’s decision to elect Cyril Ramaphosa as its next president.
The market’s reaction to Ramaphosa’s victory was in-line with predictions ahead of the time, which said that the rand would rally against international currencies, as Ramahosa is seen as a market-friendly leader that would focus on economic reform, rather than radical transformation.
However, despite hitting fresh highs, the rand fell back on Tuesday as the political reality of the situation started to sink in.
The ANC’s top 6 is now made up of a cross-slate team, where nominees from both the Ramaphosa camp and Nkosazana Dlamini-Zuma camp are present.
Market bulls see this as a ‘unified’ leadership team that will bring stability to the party, allowing it to forge a clear path forward – while the bears see it as a breeding ground for conflict, where the modernists are likely to clash with the traditionalists, and stunt any chance for progress.
Here are some of the reactions from investors and other commentators:
George Herman, chief investment officer at Citadel Investments said that Ramaphosa’s victory has buoyed investor sentiment, but warned that there was still a long way to go to revitalizing South Africa’s faltering economy.
“Ramaphosa has a small window of opportunity akin to the famous ‘100 days’ to prove that he is the catalyst for change needed in government,” Hermand said. “If he stumbles at any time during this embryonic period, he’ll be seen as a token rather than the strong leader needed and market sentiment will quickly turn against South Africa.”
Geoff Blount, managing director of BayHill Capital had a more muted response, saying that the mixed-slate top 6 means that the ANC’s National Executive Committee (NEC) will be a crucial space to watch.
“Markets got this one wrong – they were pricing in a Cyril slate victory, rather than a “hung” NEC. Hence, we expect the rand and the domestic-facing stocks to weaken after their recent rally. Some of the euphoria will be repriced out of the market and it will retrace some of its steps as the reality sinks in,” he said.
Sonja Keller, strategist at JP Morgan said that the mixed slate result could make any probability of Moody’s holding off a ratings downgrade to March 2018 an uncertain measure.
According to Bloomberg, general consensus among investment firms is that Ramaphosa as a leader is a step in the right direction, but the government and the markets will be under pressure to walk the walk, and make actual changes that would push the economy into stronger growth territory.
In a statement shortly after the announcement was made, the Democratic Alliance issued a statement saying that the ANC is dead – that the ruling party cannot undo the damage it has done, no matter who is in charge.
“The ANC is dead and cannot self-correct, no matter who is at the helm. This is because the party itself is held together only by the glue of patronage and corruption, and Cyril Ramaphosa is just a new face to the same old ANC,” said DA leader, Mmusi Maimane.
UDM leader Bantu Holomisa said there will be no paradigm shift with the newly elected ANC leadership, adding that South Africans should expect the party to continue protecting president Jacob Zuma and other ‘tainted’ ministers.
“This is a humiliation on the part of Cyril Ramaphosa’s anti-corruption campaign,” he said.
EFF leader Julius Malema, meanwhile, said that nothing has changed at the ANC.
“Nothing has really changed, the core of the corrupt premier league is at the center of the organization,” he said.
“The Guptas are still in charge and as a result it will be difficult to recall Zuma. Don’t get easily excited over nothing – but I’m happy the Zumas ate a humble pie.”
Lew Geffem, chairman of Lew Gene Sotheby’s International, said that Ramaphosa’s election was the best possible outcome for South Africa, and would provide an adrenaline shot to business confidence – notionally and globally.
“Ramaphosa has union credentials from nine years serving as General-Secretary of the SA Union of Mineworkers and his political qualifications, including five years as Secretary-General of the ANC, are unmatched. He is therefore unquestionably the one person who has the capability to unite our fractured society and economy,” he said.