February 13, 2018 / 11:38 AM / 10 months ago

Breakingviews - South Africa is nearer redemption than it looks

FILE PHOTO: President Jacob Zuma gestures as he addresses parliament in Cape Town, South Africa, November 2, 2017. REUTERS/Sumaya Hisham/File Photo - RC156FD06150

(Reuters) - South Africa wants to move forward, but Jacob Zuma is applying the brakes. That’s been the story ever since the scandal-hit president was elected in 2009. While Zuma is still clinging to power, the ruling African National Congress party’s decision on Tuesday to remove him marks a turning point.

Investors became more optimistic about South Africa’s economic prospects after Cyril Ramaphosa won a race in December to succeed Zuma as the head of the ANC. Given the party has been in power for over two decades, Ramaphosa’s victory makes the reform-minded deputy president a shoo-in to win elections next year. The catch is that Zuma can theoretically stick around until then.

The united front that the party has presented when asking him to step down means that the worst-case scenario can be ruled out. That would have seen Ramaphosa trying and failing to convince Zuma’s supporters to make him step down early. His emboldened ANC opponents would have complicated efforts to tackle South Africa’s huge economic headaches, which include rampant inequality, 27 percent unemployment, and a toxic mix of rising public debt and anaemic growth.

Zuma might still prolong the agony. Technically, the ANC’s decision changes little since the president can only be removed if a parliamentary vote of no-confidence is passed with a simple majority. By digging his heels in, Zuma can disrupt next week’s annual budget, which could be a showcase for planned reforms. And if Ramaphosa tries to speed Zuma’s departure by promising a pardon in future legal battles, his credibility will be undermined.

In practice, the ANC’s belated show of unity is important. It shows Zuma no longer has the backing that has allowed him to stall so far. The brakes on South Africa’s economy – at least, those caused by its political stasis – are about to be removed.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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