Rajen Ranchhoojee on the Potential Renegotiation of Tariffs Under South Africa's REIPPP Program
By Rajen Ranchhoojee | February.23.2018
Thursday, 15 February, 2018 ushered in a new dawn of possibilities for South Africans, with the swearing in of Cyril Ramaphosa as the country’s 5th President since its inaugural post-apartheid democratic election in 1994. What follows is the back-story to this historic and widely celebrated occurrence.
Incumbent president, Jacob Zuma, had been the deputy president of South Africa from 1999 to 2005, at which point the erstwhile President, Thabo Mbeki, removed him from office following the conviction of Zuma’s financial advisor Schabir Schaik, on charges of bribery and corruption relating to Zuma. Nonetheless, in December 2007, Zuma was elected the president of the African National Congress (‘ANC’), and within a year, had orchestrated the ‘recall’ of then President Mbeki. Through this period, deputy president of the ANC, Kgalema Motlanthe, presided as ‘care-taker’ President of South Africa. The following year, 2009, the ANC was victorious in the national election and with it, Zuma became the 4th President of the Republic. With his second term appointment as ANC president in 2012, Zuma secured himself a second term in office, a term that was expected to run from 2014 to 2019 (Presidential office is held for a period of 5 years and restricted to 2 terms).
Zuma’s decade as leader of the ANC and President of the country were characterised by endemic corruption, economic decline, political uncertainty through numerous cabinet purges, a downward spiraling currency, very limited growth and numerous credit downgrades. In December 2017, the ANC held its 54th electoral convention, which pitted apartheid struggle stalwart, successful businessman and then Deputy President of the ANC and South Africa, Cyril Ramaphosa, against Nkosazana Dlamini-Zuma (anti-apartheid activist, former Minister in the cabinets of Nelson Mandela and Thabo Mbeki, and Zuma’s ex-wife). Ramaphosa won out in the 54th electoral convention, and with it came the beginning of the end for Zuma.
Ramaphosa’s time as newly elected ANC president was for the most part spent outside of the media spotlight, though a clear-cut concerted effort was placed on personal engagement with business and policy leaders both locally and internationally, as was epitomised by an extremely successful 2018 World Economic Forum for ‘team South Africa’ led by Ramaphosa in January 2018. Ramaphosa’s understated approach continued until the first week of February. However, through the weekend of 10 February, 2018, having had earlier discussions on the matter, the National Executive Committee of the ANC deliberated on the future of President Zuma, and whether to repeat the actions it had taken in 2007 in recalling President from his post, to serve within the party.
It is worth noting that South Africa enjoys a proportional representation political system in which the President is appointed by the National Assembly (400 member Lower House of Parliament, akin to the US Congress or UK House of Commons). The extent of a political party’s representation in Parliament is based on the percentage of votes attained by political parties in the national election. The ANC has enjoyed the majority of seats in the National Assembly since South Africa’s first democratic election in 2004. The Members in the National Assembly nominate candidates to stand for the positon of President of the Republic (nominees are ordinarily the leaders of the respective Parties). The candidate receiving a majority of votes is elected to the position of President. Thus it is important to note that the President is elected in process by the National Assembly, however where a single party enjoys the majority of the House, it is in effect the will of that party that directs such an appointment. This process is important in understanding what followed next as regards the ANC National Executive Committee’s deliberations, and the actioning of a recall of its ‘deployee’, Jacob Zuma, from the position of President of the country.
Following a series of marathon meetings held through the weekend of 10 February, 2018, the ANC National Executive Committee had agreed, as a collective, to recall President Zuma from his post, in order to pave the way for ANC president Cyril Ramaphosa to take the helm for the period through to the 2019 national elections, in which he (Ramaphosa) will lead the ANC’s election campaign. In order for the ANC to manage the matter internally as a party political matter, it required Zuma to resign as President, and with the vacancy, the ANC would use its majority in the National Assembly to nominate and appoint his successor, Cyril Ramaphosa. On the evening of Monday, 12 February, following the National Executive Committee’s deliberations, Ramaphosa and ANC Secretary General Ace Magashule approached President Zuma with the decision of the National Executive Committee. In this meeting Zuma had apparently requested (or possibly demanded) certain conditions of his own, including requiring three to six months to vacate office. It became increasingly apparent that the ANC had anticipated immediate removal and that Zuma was not prepared to blindly follow the decision taken by the ANC leadership. A tense 48 hour stand-off ensued.
By the morning of Tuesday, 13 February, the impasse between Zuma and the ANC had dominated the headlines, with speculation running rife as to the near term future of the country’s leadership. The official ANC line through this period was that the ANC was in the process of engaging with President Zuma in regard to the timing of his departure, for which no deadline had been set. Back in Parliament however, a standing motion of no confidence brought some weeks earlier by the Economic Freedom Fighters (‘EFF’) party, was pending hearing on 22 February, 2018. This motion had been deferred to this rather delayed date by the Speaker of the House, prior to the ANC deliberations and ultimate decision to recall the President.
On the morning of Wednesday, 14 February, the Hawks, South Africa’s Directorate for Priority Crime Investigation raided various residences of the Zuma linked Gupta family, who along with Zuma himself, had become the face of corruption in South Africa. Three people were arrested in the morning raids, and the manhunt was on for numerous others. Zuma remained defiant throughout the day, holding a public briefing through a one on one interview, in which he repeatedly stated that he had not been told what he had done wrong and why he was being recalled, that he could not understand the urgency of his removal and that he would stand by the constitutional process required for removal of a President, that being the process laid out in Section 102 of the Constitution (Motions of No Confidence). Zuma was apparently emboldened by the 7 previous similar motions that he had managed to thwart with the support of his ANC, and politically hypothesised that the ANC would not vote on the motion proposed by the EFF.
However, that afternoon in Parliament, the ANC had joined the motion of no confidence levelled against Zuma, and the Speaker of the House had moved the motion of no confidence to the very next day, being Thursday, 15 February. The ANC had also instructed that the vote should be held by open ballot, presumably to thwart any Zuma loyalists from voting against the collective will of the ANC leadership. In the early evening, Zuma had notified the nation that he would be holding a press briefing later that night with respect to his decision on whether to step down or not. With the sides closing in, Zuma finally took the stage around 10:30pm and following over thirty minutes of non-committal language that left no trace of which way he would go, he finally confirmed that he would be resigning as President with immediate effect.
With Zuma’s resignation formally tendered to the Speaker of the House on Thursday, 15 February 2018, the motion of no confidence was removed from the proceedings and replaced with the matter of appointing a new President for the Republic. Cyril Ramaphosa was nominated unchallenged and unanimously elected as the 5th President of the Republic of South Africa. He was sworn in later that afternoon by the Chief Justice.
In the lead up to and ultimate appointment of President Cyril Ramaphosa, the South African Rand has strengthened against the US Dollar from a (stable) record low through Zuma’s tenure of ZAR16.86 to a multi-year record high of ZAR11.56 following President Ramaphosa’s election. This is the clearest indication yet that confidence in, and expectation of South Africa’s new administration is high, and that President Ramaphosa’s agenda of economic regeneration is already at work. The next step in the process is the much anticipated reshuffle of the ‘Zuma’ cabinet, which by all indications will be largely cleared out, with the expectation of a smaller, more accountable cabinet to be appointed. It is worth noting that the period of Ramaphosa’s Presidency through the 2019 national election is not deemed a presidential term in office.It is safe to say that confidence is up and hopes are high in the rainbow nation, and whilst South Africans cautiously revel in the moment, most are taking this opportunity of positive change to roll up their sleeves and once again work together to help build the country to its fullest potential.