Registered users can save articles to their personal articles list. Login here or sign up here

Possible implications of President Zuma’s recall

Chris Gilmour suspects there is a more sinister aspect to president’s request for a three- to six-month stay.

NASTASSIA ARENDSE:  The ruling party ordered President Jacob Zuma to step down as head of the state after marathon talks. According to ANC secretary-general Ace Magashule, leading members of the ANC now want the party’s new leader, Cyril Ramaphosa, to replace Zuma as president. But it appears as though the national executive seems split on precisely when President Jacob Zuma should go.

To talk to us a little more about this is Chris Gilmour, who is an independent analyst. Chris, thanks so much for your time.

CHRIS GILMOUR:  Good evening, Nastassia. Pleasure.

NASTASSIA ARENDSE:  What do you make of the announcement today by the ANC – that press briefing?

CHRIS GILMOUR:  [Laughing]. It’s been a long time coming, hasn’t it? Listening to the criticism, we can say there were very good questions there, very few of which were answered adequately in my humble option.

I think the writing is on the wall for Zuma. He’s going to be gone within days, there is no doubt about it. Whatever the ANC says, what they are desperately trying to do now is trying to save some face. It’s taken a terribly long time to get here, it’s been very, very tedious. I can understand some of the reasons why.

But now I think we’ve got to understand that he is going. Whether it’s a resignation, which would be the elegant way out of here, or whether it’s going to be via a motion of no confidence next week on the 22nd, as put forward by the EFF and the DA & Co, or whether it’s going be a motion of no confidence put forward by the ANC itself – whichever happens, he’s going to be gone relatively quickly.

NASTASSIA ARENDSE:  What I found interesting about Ace Magashule’s speech – and you can find it on the ANC website – is that “The NEC noticed the report of the officials that the president had agreed in principle to resign, and had proposed time frames extending from three to six months.” I’ve never been a trader, but I can imagine that just adds more uncertainty because we don’t know, I’ve never known, a president who’s been asked to step down to do a handover for three to six months.

CHRIS GILMOUR:  Precisely. It’s a ridiculous request and one that I imagine was given fairly short shrift, because you are quite right. He’s already a lame-duck president. He can do very little as things currently stand because he in fact was one of the first people to mention this whole bit about two centres of power. At the end of the day, there is no doubt about it, the president of the ANC definitely holds sway over the president of the country. So he’s got very little wriggle room at all. So to have a three- to six-month handover, that would exacerbate the situation of being a lame-duck president, and it would be in nobody’s interest, apart from his.

Some of the reasons put forward are he wants to go and introduce Cyril to the heads of state of various African countries, the SADC and the like – not that Cyril needs it. He is very well known as it currently stands. He doesn’t need Zuma’s endorsement by any stretch of the imagination.

I think there is probably a more sinister aspect to all of this. That’s that I think he’s desperately trying to find some sort of way of organising the nuclear deal with the Russians. He needs a bit of space in which to do that.

NASTASSIA ARENDSE:  I didn’t get from the press briefing – and I’m sure many journalists there tried to ask this question – what, when they had the engagement with President Zuma, what was discussed in terms of why he is being recalled. Does he know why he’s being recalled, or what does he think is happening at this particular point which then will explain why the NEC appears divided in terms of when he should actually go. I didn’t get that from Ace, and I don’t know whether you may have picked it up.

CHRIS GILMOUR:  Oh, you are right. As you know, there is a big lack of any form of explanation here. But I think eNCA’s Karima Brown put it particularly well – this morning, in fact. I’m paraphrasing here, but she said something along the lines of Zuma is living in this kind of parallel universe where he actually believes he has done nothing wrong. He doesn’t seem to quite grasp that he’s taken this country to the edge of the abyss. And yet, if you confront him with this, he says, well, what have I done wrong? There is just so much evidence of wrongdoing in this past ten years that it’s really not difficult to come up with a series of explanations as to why you want to get rid of him.

This morning I was listening to Colin Coleman from Goldman Sachs talking at the S&P conference, and he is very optimistic that things are going to move very, very rapidly. He didn’t say as much, but I gather a lot of this speed that’s being employed here is because we’ve got a Moody’s potential downgrade coming at the end of November, beginning of March, and I think if we can demonstrate to the rating agencies – Moody’s in this case – that the country is moving rapidly, as he said, to unscramble the situation that we’ve inherited from Zuma, and that we are doing it diligently and we really want to move rapidly towards this objective, I think there is an outside chance we might just escape a downgrade.

NASTASSIA ARENDSE:  What does it do to some of the rand gains we’ve seen since the ANC elective conference? Does it reverse those gains the longer this process takes?

CHRIS GILMOUR:  Yes. Already I think, Nastassia, you can see that the rand has come off a bit. Okay, it’s bouncing around a bit, and it’s very much moving in tandem with what’s happening with the dollar. You’ve got a relatively weak dollar at this point in time. For the rand to go markedly stronger from this point in time, if we were to get news that Zuma has been unseated and he is actually going, whether it’s by resignation or whether it’s by a successful motion of no confidence, I think there is certainly latitude for further strength in the rand in isolation. In other words, regardless of what happens with the dollar, regardless of what happens with other emerging market currencies. I think that would be seen to be very positive.

To answer your question, I think a lot of the vacillation that has taken place over the past couple of weeks has resulted in a bit of minor erosion of the rand’s value. But it’s difficult to actually unearth that from the movement in the rand relative to what’s going on with the dollar and the other emerging market currencies.

NASTASSIA ARENDSE:  Thank you so much for your time this evening, Chris.

AUTHOR PROFILE

COMMENTS   0

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

LATEST PODCASTS

Podcasts

GO TO SHOP CART

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2