South African markets nervous as ruling party debates president's future

Record ID: 1700754

  • Title: South African markets nervous as ruling party debates president's future
  • Date: 2nd December 2022
  • Summary: JOHANNESBURG, SOUTH AFRICA (DECEMBER 2, 2022) (REUTERS) SOUNDBITE (English) LECTURER AT THE WITS UNIVERSITY SCHOOL OF ECONOMY AND FINANCE, DR LUMKILE MONDI, SAYING "We are very concerned, because all of them [macro-economic issues that South Africa is facing] are human-made, stemming from the corrupt Zuma regime, and also with the lack of oversight by the president himself by finding himself entangled in this Forex scandal which is putting us in this risk that we are now finding ourselves, which we are unlikely, I doubt, we are unlikely to come out of it unscathed, and therefore going forward our growth could be undermined, and therefore the resolving of our developmental challenges are therefore getting postponed further and further leading to social and political instability in the medium to long term."
  • Embargoed: 16th December 2022 16:35
  • Keywords: CYRIL RAMAPHOSA ECONOMICS INVESTORS PHALA PHALA POLITICS SOUTH AFRICA
  • Location: VARIOUS
  • City: VARIOUS
  • Country: South Africa
  • Topics: Africa,Economic Events
  • Reuters ID: LVA006409002122022RP1
  • Aspect Ratio: 16:9
  • Story Text: The rand and South African sovereign bonds ended the day slightly higher on Friday (December 2), after ruling party officials met to decide if President Cyril Ramaphosa should stay on after an inquiry found evidence of misconduct, but failed to reach a conclusion.
    Ramaphosa's political future still hangs in the balance, with the national executive of his governing African National Congress (ANC) party set to reconvene to discuss the report before Dec. 6, when parliament will debate it.
    Senior figures considered to be allies of the president closed ranks around him on Friday. Finance Minister Enoch Godongwana told Reuters he thought Ramaphosa should continue in his job, doing whatever he could to defend himself.
    Thursday's steep market sell-off relented on Friday, although assets pared gains made earlier in the day.
    On Thursday, the rand plunged more than 4% at one stage, after news website News24 said Ramaphosa was likely to resign within hours, before cutting losses to end about 2% weaker.
    "What concerns investors are when institutions are being eroded and I think South Africa has shown time and again that the judiciary remains quite robust, our parliament remains quite robust," said Lumkile Mondi, an economics lecturer at the University of the Witwatersrand.
    "Hence, (the process) that has put the president in this position that is very unpalatable, not only for investors, but for all of us because it creates uncertainty."
    The panel investigated allegations that thieves found and stole millions of dollars of cash stuffed into furniture at Ramaphosa's game farm in 2020.
    The theft, which only came to light in June, has raised questions about how Ramaphosa, who came to power on the promise to fight graft, acquired the money and whether he declared it.
    The president has said a much smaller amount of money - the proceeds of game sales - was taken. He has denied any wrongdoing and has not been charged with any crimes.
    On Friday, ANC Chairman Gwede Mantashe told public broadcaster SABC that the party had a responsibility to reassure markets and society, pointing to the rand plunge of the previous day as a reason for Ramaphosa to stay on.
    (Production: Catherine Schenck, Siyabonga Sishi, Lucrezia Lozza)
  • Copyright Holder: REUTERS
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