South Africa’s Zuma faces new battles

June 1, 2010 - 0:0

The not-so-private life of South African President Jacob Zuma, a war in South Africa's ruling party and policy vagueness are raising questions over his leadership a year into office and stirring a barely hidden succession battle.

While the World Cup may prove a welcome distraction next month, politicking could undermine economic policy stability and make it even harder to address the growing grievances of restive black townships 16 years after the end of apartheid.
There is no suggestion yet that Zuma will not serve out his full term until 2013, but his chances of a second have certainly diminished just over two years away from the leadership contest in the ruling African National Congress (ANC).
The battle within the ruling alliance involves the Communist Party and labor federation COSATU, which supported Zuma for the presidency but are disappointed at his failure to change economic policies to give greater benefit to the poor.
Although Zuma has appointed left-wingers to Cabinet, overall policy is little different from under his pro-business predecessor, Thabo Mbeki — a fact not lost on markets.
The rand weakened after Zuma became ANC leader in 2007, with investors fearing a radical policy shift, but the currency strengthened after he took office until the euro zone crisis drove money from riskier assets globally.
Although there was no big policy change, investors are still unsure how Zuma can meet promises of better lives for the poor given very modest growth since South Africa emerged from its first recession in 17 years in the third quarter of last year.
“Investors would rather see a much deeper reform of the expenditure and reprioritizing, combined with greater competitiveness reform, but a path of tax hikes and greater spending may well be the least worst option,” said Peter Attard Montalto, emerging market economist at Nomura International.
It is the affable Zuma's private life, however, that has most shaken those nearest the president.
In January, he defended his fifth marriage as normal for a practicing Zulu polygamist but then had to deal with revelations he had a 20th child out of wedlock with a friend's daughter.
Zuma's camp was caught unawares as South Africans of all races criticized his actions. It also undermined the government's safe sex campaign to tackle one of the world's highest HIV/AIDS rates.
“He is not good for the ANC's image. Many in the party realize that they have backed the wrong horse,” said one senior ANC official, a former ardent supporter who said he was now becoming frustrated with the president's lack of direction.
The party that liberated South Africa from decades of white minority rule elects a new leader in 2012, and Communist Party chief Blade Nzimande — now higher education minister — and COSATU head Zwelinzima Vavi appear to be lining up for a bid.
Other candidates for the ANC leadership — and by implication the next South African president — could include Tokyo Sexwale, a billionaire businessman who is now housing minister in Zuma's Cabinet.
With the most money, Sexwale is in the best position to put up a formidable campaign but he lacks the crucial support from the ANC's left leaning allies.
(Source: Reuters)