The South African rand took a hit on Wednesday (10 January 2018) after it became apparent that president Jacob Zuma’s early resignation is not on the agenda for the ANC’s National Executive Committee meeting set for the weekend.
The currency slipped more than a percent, to R12.55 to the dollar by midday, before recovering slightly to R12.46 by 14h30.
Speaking to the media during at the ANC event being held in East London, new ANC secretary general Ace Magashule said that there was no item on the party’s agenda discussing Zuma or his possible early exit as president.
Magashule said that there was only one item on the agenda, namely ANC president Cyril Ramaphosa’s speech, celebrating the ANC’s 106th birthday.
There has been widespread speculation that Zuma is being put under pressure to step down as president, giving Ramaphosa room to assume control and work towards the presidential bid for 2019.
According to a report from Bloomberg, Zuma’s early exit has been factored into the price of the rand since Ramaphosa won the election to become the new party leader in December 2017. However, other insiders have revealed that the marginal victory and the divided NEC have made this difficult.
The rand had a brief spike on Tuesday as false reports of Zuma’s impending resignation – combined with headlines around the Zuma payload in the SpaceX launch going missing, confusing issues – gave the market some hope that the president would be out.
However, Bloomberg reported on Wednesday that Zuma had in fact made a deal with ANC leaders to stay in power, at least for the time being, citing three officials.
The officials said that the surprise announcement by the president to appoint a commission of inquiry into state capture in line with the recommendations by former Public Protector Thuli Madonsela were a part of this deal.
It was hoped that his climb-down would lessen the chances of him being removed before the party’s 106th anniversary celebrations this weekend, the officials told Bloomberg.
While it looks unlikely that Zuma would face any challenge in the current NEC meeting, Business Day, citing party officials, reported that a more intimate meeting could be set up in the coming weeks to discuss the matter.