Ramaphosa Reelected as South African President

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(Bloomberg) — Cyril Ramaphosa was re-elected as South Africa's president, hours after the African National Congress agreed to a power-sharing deal with business-friendly opposition parties.

Ramaphosa received 283 votes from members of the National Assembly on Friday night, and Economic Freedom Fighters leader Julius Malema received 44 votes. Parties including the Democratic Alliance and the Inkatha Freedom Party supported the nomination of the incumbent for another five-year term, and in return he would be given power. Designated ministerial positions and key positions in the Legislative Council.

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“This is a historic turning point in the life of our country, one that requires us to act and work together to consolidate our constitutional democracy and the rule of law, and build a South Africa for all its people,” Ramaphosa said after his election. In Cape Town. “With this in mind, I declare that I accept the mission you have assigned me.”

The FTSE/JSE Africa All Share Index rose 0.9% on Friday following the formation of the broad alliance, while the rand rose 0.7% to 18.305 to the dollar.

South Africa has been witnessing continuous political change since the May 29 elections, when the African National Congress lost its parliamentary majority for the first time since taking power three decades ago, obtaining just over 40% of the votes. While the ANC proposed that a broad coalition known as a national unity government rule the country, former president Jacob Zuma's new Umkhonto Wesizwe party and the left-wing Revolutionary Front party refused to join, leaving the DPP, the Italian Communist Party and other smaller parties as members.

The 400-member council earlier elected Thoko Didiza, a former agriculture minister from the African National Congress, as its president, and Annelie Loutret of the Democratic Party as her deputy. Ramaphosa is scheduled to be inaugurated on June 19, and will announce his government shortly afterwards.

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Participants are united in their shared respect for the Constitution, and will work together to grow the economy, create jobs and tackle crime, Democratic Party Leader John Steenhausen said in a speech on the party's YouTube channel. He told reporters that positions in government and legislative bodies would be allocated broadly in proportion to the parties' share of seats, although appointments had not yet been discussed.

The formation of the ruling coalition helped support financial markets because the new administration is likely to support Ramaphosa's efforts to rein in state debt and address energy shortages and logistical problems that have hampered Africa's largest economy. Excluding parties that support land expropriation and the nationalization of mines and banks will also help support investor sentiment.

The framework for the new government is still being worked out, and it is not clear which smaller parties will join, as the situation remains “very fluid,” Fikile Mbalula, secretary-general of the ANC, said in an interview.

“The next stage will be the formation of a national dialogue with all parties in the national unity government where policy will be formulated,” said Korn Mulder, head of the Freedom Front Plus, the seventh largest party. These discussions will not include any changes to the constitution.

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“We may have an interim government until this national dialogue is completed,” Mulder said. “Although Ramaphosa wants to reduce the size of the government, he may have to keep it at current numbers in order to accommodate everyone.”

The durability of the ruling coalition will be put to the test in the coming months, given the historically tense relations between its members.

The ANC has previously sought to portray the Democratic Alliance as representing the interests of big business and South Africa's white minority, and in turn has been accused of governing incompetently and failing to tackle rampant corruption. The African National Congress and the Progressive Islamic Party fought an undeclared civil war in the 1980s and 1990s, sparked by the apartheid regime, which claimed thousands of lives before a truce was declared.

Power sharing at the municipal level was also a problem. Governed by multiple parties, many of South Africa's major cities have repeatedly changed control as allegiances change, and instability has interrupted water delivery, waste removal, and other services.

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The 71-year-old Ramaphosa, one of South Africa's most experienced politicians, will play a central role in trying to ensure that the new administration runs smoothly and sustainably. Trained as a lawyer, he co-founded the National Union of Mineworkers and gained a reputation as a skilled negotiator when he led the historic talks that ended apartheid and produced the country's first democratic constitution.

He was appointed president in February 2018 and faced the enormous tasks of reforming an economy hobbled by years of mismanagement, political uncertainty and the energy crisis, addressing chronic job shortages and tackling the graft that had become institutionalized during his predecessor's tenure.

He has made some progress, removing a number of officials implicated in corruption and implementing several reforms, but energy shortages, inept state institutions and the coronavirus pandemic have hampered efforts to engineer a transition.

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-With assistance from Arijit Ghosh and Monique Vanek.

(Updates with Ramaphosa's comments in third paragraph. An earlier version of this story corrected the vote count for Malema in the second paragraph.)

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