There is a real possibility that the ANC may delay its elective conference in December – especially if the faction associated with President Jacob Zuma believes the outcome may not be in their favour, says emerging market economist Peter Attard Montalto.

In a company note, issued on behalf of Japanese bank Nomura, Montalto says investors underestimate the possibility of the December conference being delayed.

“We shouldn’t forget that the two factions (under former AU chairperson Nkosazana Dlamini-Zuma and Deputy President Cyril Ramaphosa) may end up having an interest in delaying the conference, and we still see a significant probability that it does get moved back into next year, especially if President Zuma senses that he would be on a path to an unsatisfactory outcome.”

Over-optimism

Montalto further points out that financial markets are too optimistic about the outcome of the conference, not factoring in that the status quo will in all likelihood prevail despite leadership change.

“Although the market is not assigning excessive probability to an ANC presidency under Ramaphosa, it is still attaching too much upside in structural and economic terms to a Ramaphosa-win.”

The ANC will be electing a new leadership at its 54th National Conference will be held in Gauteng from December 16 to 20 in Gauteng.

The frontrunners in the presidential race are Dlamini-Zuma and Ramaphosa, although Lindiwe Sisulu, Home Affairs Minister, Jeff Radebe, Minister in the Presidency, and Zweli Mkhize, ANC National Treasurer, and National Assembly Speaker Baleka Mbete have also come forward as willing presidential candidates.

Single slate

Montalto says beneath the surface negotiations are taking place within the ANC to agree on a so-called single slate going into the elective conference. Factionalism, however, is “too deep” to allow for any such agreement currently.

“In our view, the first best outcome for all sides and factions would be a compromise slate that prevents a deepening of divisions or even a split in the ANC. This would involve one slate being offered to the conference,” Montalto says.

A single slate, as opposed to a dual slate (of Dlamini-Zuma and Ramaphosa) will involve negotiations between all factions but principally between the two key front-runner slates.

“We believe there is some agreement on the structure of the ANC leadership and how the ANC would reform and shape itself after a unity slate was elected, including the possibly an exit strategy for President Zuma as part of such a single-slate compromise.”

Mkhize’s name has come up increasingly as a possible compromise candidate.

According to Montalto, the two key slates have amassed significant funding reserves.

“However, we understand that much of the money is potentially highly fluid and could switch sides as key members shift or as leadership candidates change. This will become especially relevant if Zweli Mkhize runs an independent campaign from Ramaphosa.”

Timeline ahead of elective conference

Montalto points to the following key dates in the run-up to the conference:

– Beginning of September: when the branch audit process should be completed;

– Mid-September: nominations are expected to open for the top six positions, namely chairperson, deputy chairperson, national treasurer, secretary general, president and deputy president and candidates for the party’s national executive committee (NEC).

– October and November: more clarity on the front-runners with other contenders likely to drop out of the “notional leadership battle”.

– 19 December: the actual election of the leadership positions, including the top six and NEC members.

[source: News24]