Watch Live: Here Comes Zuma's Critical No Confidence Vote

Yesterday, the rand soared on the unexpected announcement by the national assembly speaker (and purported Zuma replacement) Baleka Mbete that a no-confidence vote for president Jacob Zuma would take place in secret. The vote is set to take place shortly. For those willing to take a sizable gamble, here is what to expect.

Superficially, a secret vote increases the odds of Zuma’s ouster - a market friendly event and one which would send the rand surging even more - because members of the ruling party can vote him out without risking party alliances; motion requires the backing of a majority of the 400 lawmakers to pass. However, some have speculated that while Mbete, Zuma's likely successor, has every incentive to allow a secret ballot to happen, it is rarely a good idea to be the one seen to be doing the ousting. And, as Citi notes, "she stands more to gain from being loyal to Zuma if she wants to keep her party onside." Thus, the cynical view would perhaps be that the ANC has been whipping votes and believe they have the necessary numbers for Zuma to survive – he would be absolved and allowed to continue as leader, and Mbete, by allowing the secret ballot, would look like a paragon of truth and justice, putting country above party.

“We are not convinced that the opposition, the ANC and the market are adequately prepared for a successful vote, which would require 201 of the 400 MPs to vote in favor of the motion irrespective of how many abstain from voting,” Rand Merchant Bank says in note to clients

Nonetheless, Bloomberg reports that opposition parties reported to have identified more than 50 ANC MPs who have indicated their willingness to vote in favor of the motion; if correct “market reaction will be a swift rally.”  At the same time, RMB expects both the rand and bonds to give back all of yesterday’s gains and end a little weaker if vote fails. “If the vote succeeds, the immediate reaction will be a further rally in markets, followed by weakness due to potential instability and politically-driven conflict.”

Here is ING's Chris Turner with the comprehensive vote preview:

A no-confidence vote in the Presidency of Jacob Zuma is scheduled at around 1430GMT today – to be precise a debate on the vote should start around 13GMT and is tabled to last 85 minutes.

 

The ZAR rallied yesterday on the news that today’s ballot would be secret, making it slightly more likely that 50 of Zuma’s ANC MPs could defy their boss, join the 151 opposition MPs and secure the 201 votes required to win the vote.

 

We see the Rand’s reaction to the vote as binary – USD/ZAR potentially testing 12.85/90 on a rejection of South Africa’s president since 2009 or alternatively rallying to 13.55/60 should the noconfidence vote fail.

 

The balance of risks probably favours an insufficient number of ANC MPs defecting, the vote failing and the ZAR weakening.

Finally, here are the mechanics of the vote:

  • Starts at around 14:00 local time (13:00 BST/ 08:00 EDT)
  • Full South African Assembly: 400 members (of which the ANC bloc makes up 249 MPs)
  • Votes needed: 50% (or 201 votes) are needed in favour of the no confidence motion.
  • Opposition holds just 151 seats, so assuming all opposition vote for the no confidence motion, then a further 50 of the 249 ANC MPs need to vote for it. That is one in five ANC MPs.

Watch the vote live below:

Comments

The_Central_Sc… Tue, 08/08/2017 - 07:50 Permalink

The sheer speed of South Africa's fall from First to Third World status should be a warning to anyone with a Western sensibility. Like those supporters of Venezuelan socialism, the Aparteid protestors of 1985-88 are conveniently absent durning the Lessons Learned phase.

The_Central_Sc… A. Boaty Tue, 08/08/2017 - 09:29 Permalink

My intention would be to stay on the side of western civilization, with a big shout to all the old, dead white men who brought it forth, along with their belief systems, which provided support and enabled a world view.Manifest Destiny and Rule Britainnia are part of that, agreed, but not central to what made Western Civilization flourish. Justification machines are typical in any culture, i.e. Roman, Islamic, Mongolian, Japanese and so on. I don't think we'll get past this for a while during Man's Development.

In reply to by A. Boaty

Herd Redirecti… A. Boaty Tue, 08/08/2017 - 12:35 Permalink

If a person is against white, western civilization being wiped out, it does not mean they are therefore FOR white, western civilization ruling tyrannically over the entire world.Just like if I think voluntary segregation by a community should be allowed, it does not mean that community MUST be segregated, because it is 'superior'. Global trade did a lot for for GLOBAL development.   Bringing corn and potatoes to the rest of the world.  Bringing wheat, cotton, sugar, tobacco to the New World.    For every person involved in the salve trade, or the Opium Wars, or Cecil Rhodes' insidious business, there were 100 who had nothing to do with it whatsoever, just plowing their land, building houses, raising the next generation.

In reply to by A. Boaty

The_Central_Sc… RICKYBIRD Tue, 08/08/2017 - 09:46 Permalink

I would argue the blacks in SA, except the Bushman and the Xhosa tribes are the squatter foreigners, and the euro-africans, who have been resident 400+ years have more of a claim than bantus and congolese and the others who left SA virtually uninhabited until the euro-africans made it bloom. Bantus and other northern tribes invade an area and kill off tribes like Xhosa and Hottentots then claim oppression from whitey...  

In reply to by RICKYBIRD

Bastiat pmurgs Tue, 08/08/2017 - 09:38 Permalink

I have a niece married to a South African - I saw him this summer and asked about his family, some of the finest folks I've ever met.  The parents are both engineers and own their own firm. Fortunately for them, the mother is a US citizent.  Three sons live in the US now and the folks are trying to sell their business.  They have resources, regardless.   This is headed the way of Rhodesia/Zimbabwe but worse, imho.  His comment on the post-apartheid government - unrealistic goals undermined by corruption . . . and reality, of course. 

In reply to by pmurgs

DirtyHarry Tue, 08/08/2017 - 07:55 Permalink

DA  (Official Opposition) will vote for Zuma. The big prize for them is winning the 2019 general election. They want Zuma to stay on, hoping that he will do so much damage that they may win the 2019 election. Alternatively, if the anti-Zuma faction does not get their man in at the December conference where a new leader of the ANC will be elected, the party may split, again playing into the DA's hand. Why waste this opportunity? Makes you wonder why the Democrats are too stupid to see they can do the same with Trump! Leave him where he is, he is worth more to the Democrats as the President!