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Political Risks Abound as Zuma Set to Return to Prison

SOUTH AFRICA
  • This morning’s ruling to revoke Zuma’s medical parole comes at a difficult time for SA and risks adding fuel to the political risk fire that has been burning in the background since the July unrest.
  • ANC approval is currently at all-time lows following the party’s dismal showing in local general elections (46%) – resulting in a swathe of DA-led coalitions in key metros.
  • This is something the internal ANC/RET faction blames on Rampahosa, despite it being a function of years of endemic corruption under Zuma’s rule and low voter turnout.
  • More potential rioting or protest action against the ruling would be extremely difficult for Ramaphosa and SA as it attempts to get its tourism season back on track after the UK revoked its travel redlisting decision yesterday.
  • The RET faction is also highly unlikely to allow Zuma to be sent back to prison without putting up a fight – making internal factional battles inevitable over the issue in the coming months.
  • Although Ramaphosa enjoys decent personal support, another swathe of rioting and action could bring his approval into jeopardy and give his detractors more ammo to call for a vote of no confidence next year or make a firmer challenge in the 2024 elections.
  • USD/ZAR has trickled slightly higher following the announcement, but may only react more decisively if the situation appears to be headed towards widespread protest action.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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