The rand firmed in morning trade on Monday (22 January), as markets digested political events from the weekend, and as global leaders and influential businessmen flock to the World Economic Forum (WEF) annual meeting in Davos, Switzerland.
The World Economic Forum in Davos-Klosters is scheduled to take place between 23 and 26 January 2018 under the theme: “Creating a Shared Future in a Fractured World”.
Led by deputy president Cyril Ramaphosa, the South African delegation includes a broad range of leadership from various sectors of the economy and society, with minister of finance Malusi Gigaba as the lead minister and coordinator.
Ramaphosa will be supported by the minister in the presidency for planning, monitoring and evaluation Jeff Radebe; minister of economic development Ebrahim Patel; minister of trade and industry Rob Davies; minister of public works Nkosinathi Nhleko and minister of international relations and cooperation Maite Nkoana-Mashabane.
The presidency said the forum presents South Africa with a platform to showcase its attractiveness as an investment destination and trade partner, set out plans that are unfolding to secure improved and inclusive economic growth, and contribute to efforts to respond to societal challenges globally.
Meanwhile, Bloomberg reported that the clock is ticking on president Jacob Zuma’s scandal-ridden administration.
While the ANC’s top leadership has decided that Zuma, 75, must leave office – to win back voters and stoke investor confidence in the stagnant economy – without setting a deadline, newly elected party leader Ramaphosa and his supporters have moved decisively on two other fronts.
His office and the Ministry of Public Enterprises announced sweeping changes to the board and management of struggling state-power utility Eskom Holdings.
As well as deciding Zuma must step down on Friday, the ANC National Executive Committee suspended the party’s pro-Zuma provincial executive committees in the provinces of KwaZulu-Natal and Free State that the courts said weren’t properly elected.
“It is as if Cyril is confirming that he has taken over the reins,” said Susan Booysen, a political science professor at the University of Witwatersrand’s School of Governance. “I would say Zuma will be gone in anything between 10 and 30 days maximum.
Zuma’s exit would catapult Ramaphosa into the presidency and allow him to begin to repair an economy that suffered its second recession in almost a decade in 2017 and has struggled to mount a strong recovery. He’s also vowed to fight the graft that have marred Zuma’s administration, Bloomberg said.
An open question remains whether Zuma will step aside before Feb. 8 so that Ramaphosa can deliver the annual state-of-the-nation address, it said.
Ramaphosa is expected to adopt more business-friendly policies, even though he enjoys the support of the communist party and the biggest labor union federation. His election as ANC leader helped boost the rand 10% last month.
At 08h00 on Monday, the rand looked to target a push below 12.08 against a weaker dollar, while the local currency also firmed against the pound and the euro.
- Dollar/Rand: R12.08 -0.78%
- Pound/Rand: R16.77 -0.91%
- Euro/Rand : R14.79 -1.70%
At a meeting of the NEC on Friday, Ramaphosa cemented his control of the party, with his allies winning most of the seats on the 26-member National Working Committee that oversees the running of the ANC on a day-to-day basis.
“We are definitely in a phase where Zuma’s power is waning and Ramaphosa’s is on the rise,” said Judith February, a senior research associate at the Institute of Security Studies, by phone from Cape Town.
Reporting with Bloomberg.