The controversial South African President, Jacob Zuma, finally resigned from office last week as it became clear he would not survive a scheduled confidence vote in the South African Parliament after having been abandoned by his party, the ruling African National Congress, which has been in power during the entirety of the country’s democratic period. He was succeeded by Cyril Ramaphosa, an ex-Deputy President with a long and solid track record within the ANC and trades union movement. As the “rainbow nation” approaches a quarter century since the demise of the racist apartheid system, what does this change of leadership foretell for the future of South Africa and its currency, the Rand?
We might start with looking at Ramaphosa himself. In many ways he a typical ANC leader. Born in Soweto, jailed by the apartheid regime as a young activist both before and after the 1976, activist lawyer, leader of the National Mineworkers Union which was so instrumental in shaking the system during the strikes of the 1980s. The fact that he was never a member of the South African Communist Party may place him on the relative right wing of the ANC, reassuring markets and capitalists. Although he has been a very wealthy businessperson for several years, unlike ex-President Zuma, he has never been charged with any crimes. In 2014, when there were increasing calls for the Afrikaans segment of the national anthem to be scrapped, he spoke out against the proposal, citing the need to hold out a “hand of friendship” to the Afrikaner minority. On the other hand, poorer South Africans are still desperate for a major improvement in the country’s infrastructure, and they may be wary of Ramaphosa as too pro-capitalist at their expense. If his government can deliver major improvements such as full electrification and boost employment and the economy, they will tend to forget their concerns.
The day after President Ramaphosa assumed office, the South African stock market rose strongly, and the Rand reached its highest level against the U.S. Dollar since 2015. The currency remains strong. Ramaphosa might also be the catalyst to save the endangered South African mining industry, as he has been leading the calls to give it a new legal framework which would be more attractive to investors.