Zuma stays, for now

Following a marathon ANC National Executive Committee (NEC) meeting, the NEC announced that it rejected the call for President Jacob Zuma to step down and the party does not expect mass resignations as a consequence.

The rand weakened in response to the news that President Jacob Zuma had survived a three-day attack on his leadership from within the ANC''s National Executive Committee (NEC).

The rand opened at R13.73 to the dollar on Tuesday and was approaching the R14 mark by midday, trading at R13.95.

“The fact that the rand has moved so much shows that it is politically driven,” Petri Redelinghuys, independent trader and founder of Herenya Capital, told Fin24.

Speculation around Zuma possibly leaving office indicated some sort of political stability and the currency strengthened, he explained. Following the new developments, the currency has taken a dip.

According to the chief economist of the Efficient Group in Gauteng, Dawie Roodt, the removal of Zuma will not be good for the medium term as this will introduce an element of uncertainty which will impact the currency.

Among the negative influences, Roodt said that high inflation, political uncertainty, weak economic growth and the increasing current account deficit all contributed to the currency''s depreciation.

“If we do not add to the woes, the chances are the currency will appreciate,” said Roodt.

Among the “woes” would be a possible credit downgrade by ratings agency Standard and Poor''s to junk status, which will result in the withdrawal of institutional investors.

Roodt added that although institutional investors are important, speculators are just as important. They may view the undervalued currency positively and see it as “cheap entrance” to markets.

After surviving an unparalleled attack on his leadership of the ANC, a defiant President Jacob Zuma told the party''s NEC that stepping down would be like handing himself over to the enemy and he would never do it.

Zuma addressed the NEC following a gruelling three-day battle over his future, initiated by Tourism Minister Derek Hanekom.

The NEC deliberated on Zuma''s fate following a “surprise” motion by Hanekom on Saturday that the party''s highest decision-making body recalls the president or that he steps down.

“The president told us that he will never step down, as it would be like handing himself over to the enemy, and that there are people who want to see him in jail and they will never stop,” an NEC member told News24.

Zuma faced his toughest battle yet within the party. At least three of his cabinet ministers (Hanekom, Thulas Nxesi and Aaron Motsoaledi) called for his head, supported by senior NEC members. It was reported that Science and Technology Minister Naledi Pandor also supported the anti-Zuma motion.

A source told News24 that plans for the motion had been in the works for a couple of weeks, but the numbers had stayed low.

Zuma told the NEC that attempts against him have been long in the making, dating back to former president Thabo Mbeki''s era.

Mbeki sacked Zuma as deputy president of the country on 14 June 2005, weeks after Zuma was implicated in the corruption and fraud of his former financial adviser Schabir Shaik.

“The president told us these attempts come from far and that if he was the problem, he would consider stepping down. But Nkandla, corruption charges and the spy tapes were created by the enemy,” the NEC source said.

Zuma had to pay back R7.8 million to the state for the Nkandla upgrades after the Constitutional Court ruled that he had failed to uphold the Constitution. Zuma declined to implement former Public Protector Thuli Madonsela''s remedial action that he pay back the money spent on upgrades to his Nkandla home.

A source inside the NEC meeting said there was no voting on the motion as Zuma''s supporters had regrouped and were on “fire defending him”. They had felt “ambushed” on Saturday as they did not expect Hanekom''s motion. But on Monday they are said to have dominated the “long speaker''s list”.

Water Affairs Minister Nomvula Mokonyane apparently spoke out against the motion, while former National Assembly speaker Max Sisulu strongly pushed for a consultative ANC conference to be held.

This follows meetings by more than a hundred party stalwarts with the ANC''s national working committee including Zuma last week, calling for a consultative conference to rebuild the party

It is unclear whether Sisulu''s call succeeded. While one NEC member said calls for a consultative conference were completely rejected, some of Zuma''s supporters appeared willing to consider a compromise. One proposal is that next year''s policy conference be extended to focus on rebuilding the organisation.

Indications that Zuma was winning the battle emerged late on Monday afternoon when he left the NEC meeting to meet with his Ugandan counterpart Yuweri Museveni. He departed for Cuba yesterday to attend the funeral of late Fidel Castro.

NEWS24