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South Africa in focus: Jacob Zuma stays defiant in face of ANC pressure

by | 13 Feb, 2018

The South African President remains defiant in the face of certain defeat

The South African stock market got a boost today as proceedings to remove President Jacob Zuma continued, led by the top brass in his party, the ANC. 

This Tuesday the ANC revealed the outcome of Monday’s 13 hour meeting in Pretoria, where Zuma was still resisting pressure to resign. The ANC Secretary General Ace Magashule told a media briefing that the party had officially recalled the President and would seek to remove him by a vote of no-confidence in Parliament unless he chose to resign. It is a vote Zuma is sure to lose off the back of weakening support not only in his party, but in the country as a whole. Regardless, Magashule said Zuma told him the NEC (the ANC’s National Executive Committee) had no right to make such a ruling, signalling his intention to fight on despite mounting pressure. 

Zuma has been in his post for almost 10 years and has become known as the ‘teflon’ President for his ability to hang on to his position amid scandals, having survived more than 6 no-confidence votes in Parliament thus far. On this occasion though, his time may be up.

Magashule said Zuma had asked to remain in his post for another 3 to 6 months, though he was rebuffed due to the urgency of restoring integrity to public institutions. The South African Rand responded negatively to the news of Zuma’s stubbornness in the face of certain defeat, falling today against the U.S. Dollar.

Hopes will be high that under new leadership, South Africa will be able to improve its economy and encourage more foreign investment. The country is beset by problems including high unemployment and political corruption as well having faced credit rating downgrades in 2017. Zuma’s likely successor Ramaphosa has never been charged with corruption and is considered to be a man of intelligence and administrative ability, but he faces great challenges in reforming a struggling economy. Zuma’s decision to remove his finance minster Pravin Gordhan last year was the final nail in the coffin for many who believed Gordhan’s economic leadership was keeping the ship steady.

Keep an eye on the FTSE South Africa Index and the Rand in the days to come. More clarity about when Zuma will go will likely improve investor confidence and help stocks and the currency to rally, though for now uncertainty prevails.

Related: Gold in bull market as Dollar weakness drives interest higher

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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