Rand sings as Ramaphosa gets second term as ANC president

The South African rand strengthened by more than 2% against the dollar on Monday (19 December) after president Cyril Ramaphosa secured a second term as ANC president.
Following the announcement, the rand strengthened to R17.22 against the dollar, having started the morning over R17.60 ahead of the election results.
The rand’s fate has been inextricably tied to the president over the last few weeks after a report on the Phala Phala scandal in late November threw markets into a spin over, uncertain about whether or not Ramaphosa would stick it out as in his position.
After Ramaphosa opted to fight the report, and his party quashed the report’s adoption in parliament last week, market jitters over the political uncertainty in the country eased.
However, one more hurdle lay ahead – the outcome of the ANC elective conference.
The ANC announced this outcome on Monday, with Ramaphosa securing a second term as president with an outright majority of votes. Except two positions – deputy president, which Paul Mashatile won, and first deputy secretary general, a position now held by Nomvula Mokonyane – it was a near clean-sweep for Ramaphosa’s slate in the party’s top 7.
Whatever the political sphere thinks of Ramaphosa, he has proved extremely popular with investors and businesses. His second term as ANC president signals a continuation of the economic policies he has championed over the last five years.
Despite the ANC victory, the road ahead is still not stable or perfectly clear, however.
Political analysts have noted that the Phala Phala scandal has left the president’s reputation damaged, and he now owes much of his political standing and capital to certain personalities who are not held in the same regard.
On Monday, following the announcement, the rand was trading at these levels against major currencies:
- ZAR/USD: R17.21 (-2.44%)
- ZAR/EUR: R18.29 (-1.93%
- ZAR/GBP: R21.03 (-2.14%)
Good news for stability
According to an analysis from Bloomberg, Ramaphosa’s victory is good news the ANC, and also good news for political stability.
Support for the 110-year-old ANC, which has ruled South Africa since the end of apartheid in 1994, dropped below 50% for the first time in a local government vote last year, and several opinion polls show it’s in danger of losing its national majority in 2024.
Confidence in the party has been eroded by its failure to head off an energy crisis and stem an economic decline that’s spawned rampant unemployment, inequality and crime.
Ramaphosa is one of the country’s most seasoned politicians. A former labour union leader who made a fortune after going into business, he helped to negotiate a peaceful end to White-minority rule in the early 1990s and led a panel that drafted the country’s first democratic constitution.
He succeeded Jacob Zuma as the nation’s president in early 2018 and pledged to tackle the economic malaise and endemic corruption that set in during his predecessor’s nine-year rule.
Since then, he has effectively ended the monopoly of Eskom, the debt-stricken state power utility that’s subjected South Africans to intermittent blackouts since 2008, freeing companies to build their own generating plants and supply the grid. The spectrum needed to modernize the nation’s telecommunications industry was sold after more than a decade of delays.
Ramaphosa has also made progress rebuilding the nation’s law-enforcement capabilities that were systematically hollowed out under Zuma. Several former leaders of state companies, politicians and party officials have been charged with corruption.
He’s been less successful in firing up an economy that’s been battered by the coronavirus pandemic and the energy crisis, and business leaders and foreign investors have called for the acceleration of reforms needed to help reduce a 32.9% unemployment rate.
Ramaphosa’s victory is good news for the ANC — a recent opinion poll showed support for the party would drop to between 30% and 40% if he were to be replaced as its leader.
With Bloomberg