21 April 2017

South Africa: President Zuma Unlikely to Be Ousted - Research

President Jacob Zuma is unlikely to be ousted by the National Assembly, however a negotiated exit is more likely, according to research.

BMI Research, part of the Fitch Group Company, released research which looked at the impact of the Cabinet reshuffle on the economic outlook. The Cabinet reshuffle, which took place in March, saw the president replacing former finance minister Pravin Gordhan with Malusi Gigaba.

The reshuffle led to public protest, with calls for Zuma to go.

However the research indicates that Zuma has "enough influence" within the ANC to resist any challenges to his position. "Any move to oust Zuma in the legislature will require votes from the ANC, but Zuma's strong position within the ANC power structure limits the risk that the party will vote against him," the report explained.

There are three means by which the president can be removed, as illustrated by the report.

The first is a motion of no confidence, a simple majority of 201 votes is required. This scenario is unlikely to unfold. In the past, smaller parties had voted with Zuma, and for a no confidence vote to be successful at least 60 ANC members should vote against Zuma.

The second option is impeachment, which requires 267 votes, or just over more than two-thirds s of the assembly. This is "highly unlikely" and requires an "even greater" number of ANC members to vote for the impeachment.

The final option is a recall by the National Executive Committee (NEC). This is a decision taken by consensus, rather than a vote. This is highly unlikely as more than half of the NEC sides with Zuma.

For this reason, a negotiated exit will be considered. "Zuma must be offered a dignified exit that protects him from future prosecution," the research explained. The pro-Zuma faction will likely look to maintain its influence. Whichever candidate is chosen next, should also ensure the ANC's victory in the 2019 national elections, BMI explained.

In this case, the prospects of structural reform will be "slim".

A compromised candidate, potentially chosen by Zuma would likely win the elective conference in December. Limited scope for reform means there will be less economic diversification, impacting long term economic growth. Growth is projected at 2.2%, and the average fiscal deficit will be at -3%. Government debt should be at 50.4%. There is a 50% chance this scenario will materialise.

If reformists rally, public unrest would force the ANC to choose a reformist candidate. Some reforms are likely to result, but may be limited due to infighting. In this scenario growth is projected at 2.7%, the fiscal deficit will be at -2.4% and government debt will be at 45.6%. There is a 40% chance this scenario will unfold.

There is a 10% chance the ANC will publicly oust Zuma. It would require the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) to side against Zuma. Additionally, reformists should vote no confidence.

This scenario, however, will lead to a coalition government outcome for the 2019 national election, the research indicates. Projections for the economic outlook would be determined by the coalition composition.

Source: Fin24

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