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November 25, 2020

Africa

SOUTH AFRICA: NEC unlikely to resolve its Ace problem

BY Anne Frühauf

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( 4 mins)
  • An ANC National Executive Committee (NEC) meeting this weekend will probably fail to resolve the thorny issue of whether Secretary-General Ace Magashule should step down over corruption charges.
  • Magashule’s fight against a suspension will provide a signal of the ANC’s internal balance of power and President Cyril Ramaphosa’s strength.
  • It may signal how bruising a battle the ANC’s 2021 National General Council (NGC) will shape up to be and, by extension, how much room for maneuver Ramaphosa has to tackle corruption and economic reform.

Where’s the moral compass?

As was to be expected, the ANC is struggling to deal with the Magashule problem, notwithstanding past party resolutions on the issue. An NEC meeting at the end of August affirmed that officials “formally charged” with corruption and other serious crimes should step down. Given that Magashule has been formally charged and released on bail, there should be little ambiguity about his case.

Nevertheless, signals this week suggest that the ANC will hide behind legal advice suggesting that its resolution is legally difficult to enforce given the presumption of innocence. This means the decision will once again be a political one, depending on the balance of factional support within the NEC. As a result, no clear resolution is the most likely outcome; at best the matter could be referred to the ANC’s disciplinary committee.

Does Ace’s fate really matter for the reform outlook?

Magashule’s fate matters for the reform outlook in that it provides clues regarding the internal balance of power between Ramaphosa’s ‘reformist’ faction and Magashule’s ‘radical economic transformation’ (RET) faction. On balance, the RET faction cares less about fiscal challenges and governance. If Magashule remains in office, it will reinforce his ability to control party branches ahead of the ANC’s NGC, which was postponed due to the pandemic. The NGC is now being planned for April, though delays seem likely given the branch and regional meetings that must happen in advance. If Magashule can manipulate branch participation in his favor, Ramaphosa will likely face a greater opposition, which could even extend to calls for his ‘recall.’ Such a high-impact outcome still seems unlikely as the NGC is not an elective conference, but Magashule’s continued presence in Luthuli House will remain a thorn in Ramaphosa’s side.

Nevertheless, framing the reform outlook as a mere power struggle between two factions is too simplistic. Ramaphosa’s own supporters are by no means united about reforms (with the public sector wage issue and energy reforms being prime examples). Similarly, the latest double-downgrades from Moody’s and Fitch may not fundamentally reinforce the impetus for economic reforms. At the top of cabinet, Ramaphosa and the likes of Finance Minister Tito Mboweni are broadly committed to expediting reforms. They are broadly working in the right direction (e.g. regarding wage freezes and some energy sector reforms). However, beyond the Union Buildings, it is extremely hard to pull along the rest of cabinet, the NEC, Tripartite Alliance partners and various vested interests. Key issues to monitor over the coming months will include: the Eskom debt question, for which Public Enterprises Minister Pravin Gordhan has promised a solution by the end of the year (unlikely), and the public-sector wage issue, which the courts will hear in December.

Lack of state capacity is also a serious drag on reforms. Top positions at ministries like the Treasury and Public Enterprises look increasingly depleted. Mboweni seems so reclusive that his position could become untenable in 2021. With few obvious successors in place, mooted replacements could include Deputy Finance Minister David Masondo (more of an ideologue), Justice Minister Ronald Lamola (very likable but inexperienced in public finance) and even Public Enterprises Minister Pravin Gordhan (who may not be as well-received the third time around). The standout choice would be Reserve Bank Governor Lesetja Kganyago, who could beat all other candidates if he enters the ring.

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