The faction within the ANC that is aligned to president Jacob Zuma is starting to come undone, as a significant portion of his support base is splintering off – against him.
This is according to market research analyst at Nomura, Peter Attard Montalto, who was recently in the country to gauge its political stability.
Nomura has always held that there are two ‘main’ factions within the ANC – pro-Zuma ‘tenderpreneurs’, dedicated to sustaining the network of patronage that keeps thousands employed in government, and the anti-Zuma reformists, who seek to bring governance back into the hands of the people.
The to-and-fro between the two factions has primarily played out between Zuma-aligned organs of state (the NPA, Hawks) feverishly chasing after finance minister Pravin Gordhan, heading up another centre of power (National Treasury) which has not yet been captured.
However, poor strategic moves by the Zuma faction have led to a number devastating blows to the president, which has led to more conservative faction members turning against him.
Notably, this group is not against tenderpreneurship and patronage – but no longer see Zuma as a viable candidate to carry out its plans. According to Attard Montalto, it was this group which put pressure on Zuma to reappoint Gordhan, after Des “four-day” van Rooyen’s appointment as finance minister upset the markets.
It was also this group which pressured Zuma to have the charges of fraud against Gordhan dropped, as they see it as a futile path, Attard Montalto said.
This means that there are now three key factions in the ANC – a pro-Zuma-pro-patronage faction, an anti-Zuma-pro-patronage faction, and an anti-Zuma-anti-patronage faction.
“The (pro-Zuma-pro-patronage faction) is status quo, all eyes on winning in 2017 and not on 2019. They are willing to flex around the constitution but ultimately are making mistakes, and are not very efficient at what they are trying to achieve,” Attard Montalto said.
“They are interested in capturing National Treasury and putting pressure through security structures and the NPA on those against them, especially Pravin Gordhan.”
“The anti-Zuma-pro-patronage faction is, however, much more efficient, looking to 2019 as the key priority (understanding that patronage is impossible if you don’t win an election), and see the route through 2017 as clear for them if they are demonstrating a winning ticket into 2019.
“They are more interested in preserving constitutional democracy and while they would love to have access to National Treasury, (they) see the route to get there -through NPA charges etc and pressurising Pravin Gordhan – as inefficient and potentially damaging to their long-run aims and chances of winning in 2019,” he said.
Zuma says yes to everyone
The current landscape has made predicting market movements and future political moves incredibly difficult – because there remains one completely unpredictable factor: Zuma himself.
“Put simply, (Zuma) says yes to everyone,” Attard Montalto said.
“One faction will say ‘we want to charge PG’ and he will give his agreement, and another faction will say ‘this isn’t working, drop the charges’ and he will also say yes.
“Ultimately, the core issue here is that Zuma works not by detailed central micromanagement but by doling out political capital to factions and groupings around him who then work semi-autonomously,” he said.
According to the analyst, this is what is happening now with the so-called “spy unit” charges that are expected to be laid against Gordhan – and why Nomura still believes that the charges will come in the weeks ahead.
Currently, the main key issue is whether Gordhan stays in his position or goes – and that prerogative remains with the president. With the split in Zuma’s faction, the likelihood of Gordhan being removed from Treasury has diminished – but Nomura still pegs the probability at 40%.
Risk remains high due to the strong sense of denial from the Zuma-aligned factions – but there are only two key moments left in the year: potential spy charges before Christmas, and the expected credit downgrades.
“If it doesn’t occur by then we can’t say exactly that Pravin Gordhan is safe – a ‘scorched earth’ strategy would remain possible- but tactically it would be much more difficult,” Attard Montalto said.