The upcoming 54th national conference of South Africa’s ruling African National Congress (ANC) to choose new leaders will not only determine its fate at 2019 general elections, but also has implications for the economy.

Africa’s biggest economy has wobbled as investors fret over undue political influence in policy under President Jacob Zuma.

The party will elect, among others, a successor to Zuma as party president, and the winning candidate is almost certain to be the country’s next head of state, given that the ANC will likely hold on to power in 2019.

Deputy President Cyril Ramaphosa, a former businessman widely favoured by investors, has emerged as a front runner alongside the former African Union Commission chair Nkosazana Dlamini-Zuma. She was also a cabinet minister and is expected to push a left-leaning, pro labor agenda.

Campaigning as “NDZ” the medical doctor who is favoured to lead the ANC by Zuma, her former husband, is an advocate for “radical economic transformation”.

Victory for Ramaphosa would please investors who say Jacob Zuma has abused his political power to further his personal financial interests. Zuma is accused of purging competent ministers who tried to uphold sound fiscal policies that had previously served the economy well.

The economy has stalled since Zuma came to power in 2009, struggling to shake off the impact of a  recession which slashed a million 

jobs. Growth is seen under 1 percent in 2017, and South Africa has also lost its investment grade credit ratings, with agencies all highlighting uncertainty over the government’s commitment to a sound economic path.

Investors and financial markets are eyeing the ANC leadership battle for a steer on whether it will get back onto a pro-business path, or veer further left.

“Over the longer term, a Dlamini-Zuma victory would signal a sharp rhetorical shift towards more leftist economic policy,” said John Ashbourne, Africa economist at Capital Economics.

“This would probably spook investors, particularly those involved in the mining and agricultural sectors. Given her commitment to higher public spending, a further credit ratings downgrade would be almost inevitable.”

Ashbourne noted that Ramaphosa’s campaign had won support from urban constituencies and economic reformists within the ANC, who see the former mining magnate as the best chance for a more business-friendly administration.

Although the ANC has comfortably won general elections since the first democratic vote in 1994, when Nelson Mandela became the first black president, it popularity has waned under Zuma’s leadership, and the outcome of its 16 – 20 December conference could signal how it will perform in 2019.

The ANC is still smarting from the loss of control in three major municipalities in 2016 local government elections which were held against the background of corruption charges against Zuma, which he rejects. The ANC lost control of three metros including Johannesburg the economic hub, Tshwane and Nelson Mandela Bay.

A poll by technology based research and polling company Ratepop suggests that the ANC would lose more voters if Dlamini-Zuma emerges victorious against Ramaphosa.

The poll of  2,100 South Africans who voted for the ANC last year, showed that slightly more than 81 percent would stay loyal to the party in 2019 if Ramaphosa was its leader, against nearly 19 percent who said they would not.

With Dlamini-Zuma as candidate, 44 percent said they would vote for the ANC, while 57 percent would abandon the party.

“With the ANC only having polled only approximately 54 percent in the 2016 local government elections, the chances of the ANC maintaining its parliamentary majority with Nkosazana Dlamini-Zuma at the helm of the party, is substantially reduced and realistically unlikely at this point,” Ratepop said.

Whatever the outcome of the vote, also key for investors will be whether the ANC can put behind it the  infighting that has riddled the party in recent months, and turn its focus back to governing the country.

“A positive outcome will be an election that isn’t contested afterwards and an elected faction that is pro the economy,” said CEO of Retail Capital which provides funding to small businesses in South Africa.

“A positive outcome will be an election that isn’t contested afterwards and an elected faction that is pro the economy.”

African News Agency (ANA)