The Falling Star Of Cyril Ramaphosa (And The ANC's)
The election ticket of South African President Cyril Ramaphosa was the dismantling of corruption. Being accused by a spy chief of money laundering and defeating the ends of justice in the Phala Phala case could end his career, sink a vulnerable ANC and usher in an era of coalition politics.
Figure 1: South African Rand Real Effective Exchange Rate
Source: Datastream
Ramaphosa has confirmed that more than four million dollars, which were proceeds from the sale of game, were stolen from his Phala Phala game and cattle farm by criminals who were colluding with his domestic worker. The question is why Ramaphosa did not open a case following the theft, thereby concealing a crime and potentially pointing to the fact that he had not declared large amounts of foreign currency. Irrespective of Ramaphosa's troubles, some will say that that the writing was already on the wall for the ANC in the 2021 municipal elections, which saw the ANC only securing 50.2% of the votes in the industrial heartland of Gauteng, and which ushered in opposition coalitions now in control of Johannesburg, Tshwane and Ekurhuleni, which are South Africa' three main urban centres. But as long as a highly popular Ramaphosa was still in charge, especially after prevailing over the faction of ANC members who favoured ex-President Jacob Zuma, there was hope that the ANC would just scrape through the 2024 elections with a narrow majority of the votes. Yet if Ramaphosa is charged, he would have to relinquish ANC leadership, according to the party's step-aside rule in case of criminal charges. Even if the ANC stops enforcing the rule, as it has previously done for some, it would destabilize the party. Ramaphosa's decline will make coalition governments the norm. While this is the outcome of a mature democracy, we expect a period of 10-15 years of political instability as it settles.