Ramaphosa Elected President Of ANC: South African Rand Soars 4%, Biggest Jump In 2 Years

Update 2: It's all over, and the best case outcome is now fact, with Cyril Ramaphosa elected president of South Africa’s ruling African National Congress on Monday.

  • CYRIL RAMAPHOSA ELECTED PRESIDENT OF SOUTH AFRICA'S ANC
  • RAMAPHOSA GETS 2440 VOTES IN S.AFRICA'S ANC LEADERSHIP VOTE

Ramaphosa victory threatens President Jacob Zuma’s grip on power after the most divisive vote in the party’s history. Ramaphosa, the deputy president, defeated Nkosazana Dlamini-Zuma, Zuma’s former wife, whom the president had backed. As the FT notes, it is widely speculated that Mr Zuma lent Ms Dlamini-Zuma his support because he believed that as state president she would protect him from prosecution in a corruption case.

Meanwhile, Ramaphosa campaigned on a promise to root out corruption and save the ANC from losing its majority for the first time at the 2019 election.

During his campaign, Ramaphosa made thinly veiled attacks on Mr Zuma’s relationship with the Gupta family, who are accused of using their friendship with the president to influence cabinet appointments and state business, and promised to root out corrupt ANC officials. Mr Zuma and the Guptas have denied allegations of corruption.

As charted below, the South African rand surged against the US dollar on the announcement of Mr Ramaphosa’s victory, higher by more than 4% on the day, its biggest one day gain in over two years. 

“The country outside the 5,000 ANC delegates has breathed a huge sigh of relief,” said Lawson Naidoo, executive secretary of the Council for the Advancement of the South African Constitution, which has campaigned against the perceived attack on independent institutions under Mr Zuma. “We can now put a break on the downward slide of South African politics and economics,” he said.

Ramaphosa, a former union leader who used his ANC ties to become one of South Africa’s richest black businessmen in the post-apartheid period, was seen as the candidate most able to unite business and the government to reignite the economy, which has ground to a halt under Mr Zuma.

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Update: not so fast - according to News 24, a recount for the ANC presidency is underway, adding that "NDZ's camp insisted on recount after she lost the vote, they say. That may cause the delay in announcement."

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The South African currency and local equities soared on Monday amid investor hopes that pro-reform candidate Cyril Ramaphosa has won a victory in the ruling ANC’s leadership contest. While the South African Rand suffered a bumpy start to the day as it became clear that the vote would go down to the wire, shedding all of its early gains. The ZAR has since soared, enjoying its biggest one-day gain in over two years, as ANC chief whip Jackson Mthembu told journalists he was confident Ramaphosa had a clear majority.

With official results expected shortly, the rand is now over 4% higher on the day, rising as high as 12.56 against the dollar.

The rand's ascent accelerated following Reuters headlines suggesting that Ramaphosa appeared a near-certain winner:

  • ANC LEADERSHIP CANDIDATE RAMAPHOSA GRINNING ON STAGE, HUGGING SENIOR ANC OFFICIALS - REUTERS WITNESS
  • SOUTH AFRICA'S ANC CHAIRWOMAN SAYS "THE ANNOUNCEMENT WILL BE IN FIVE TO TEN MINUTES"
  • ANC LEADERSHIP CANDIDATE DLAMINI-ZUMA SITTING CALMLY ON SEAT - REUTERS WITNESS
  • ANC DELEGATES BREAK OUT IN SONG AND DANCE BEFORE EXPECTED LEADERSHIP ANNOUNCEMENT

In addition to the currency, the country’s government bonds also gained, with yields on 10-year debt sliding 21.6 bps to 8.914%. Meanwhile, among stocks, banks were the biggest beneficiaries on South Africa’s equity markets, with the FTSE Johanessburg Stock Exchange index of bank stocks rising 6.6% to the highest level on record.

Readers can watch a live stream of the ANC's 54th national election here.