The ANC succession debate, which includes the speculation of a possible Patrice Motsepe candidacy, is making its way through financial markets circles as pundits debate how the change of guard in the country’s largest party will affect reforms.
A report compiled by Bank of America after its annual conference earlier this month shows the ANC succession was discussed, with speakers emphasising that the reform window is narrowing and ANC succession in December 2027 could slow or derail reforms.
“In early succession debates, three names consistently appear at the top of surveys: Paul Mashatile, Fikile Mbalula and Patrice Motsepe," the report reads. “The latter ‘M’ appears to be the most ‘market-friendly’ potential successor but is viewed as an outsider in ANC leadership structures, and it is not certain he would run at all.”
Motsepe, whose investment vehicles own large chunks of Sanlam, African Rainbow Minerals and Harmony, among other entities, has been at pains to dismiss speculation about his supposed political ambitions.
In March, he used African Rainbow Mineral’s results presentation to describe the speculation as “false and unfounded”.
However, this has not stopped his name doing the rounds in political circles as a possible successor to President Cyril Ramaphosa, with the ANC heading to its elective conference next year.
The conference was attended by 44 institutional investors, including 24 offshore investors and scores of corporates.
Should he run, Motsepe, with an estimated wealth of $4bn (R65.3bn) according to Forbes, will be one of the wealthiest candidates to seek the country’s highest office.
The DA, the second-largest party in the government of national unity (GNU), recently elected new leadership, placing Cape Town mayor Geordin Hill-Lewis at the helm of the party, with a new generation of leaders set to take the party to the 2029 elections.
The ANC will head to the 2029 general elections on the back foot, having lost its outright majority in the watershed 2024 election, forcing it to enter into a coalition government.
The ANC’s deputy president, Paul Mashatile, by token of his position, is seen as a likely contender for the top position. So is the party’s secretary-general, Fikile Mbalula.
The Bank of America said much hinges on the ANC succession debate.
“While the GNU is currently viewed positively, political experts suggest that an ANC result under 42% could trigger internal pressure on Ramaphosa, raising the risk of coalition strain or renegotiation. However, the same political analysts also see ANC leaders as pragmatic, supporting employment and growth objectives which could keep the GNU intact,” the report reads.
On the economy, Bank of America joined a growing chorus of market pundits who expect the South African Reserve Bank to hike interest rates at its next monetary policy committee meeting after the impact of the Middle East war on oil prices and, by extension, the inflation trajectory.
Under Bank of America’s baseline scenario, fuel prices are likely to increase 24% ― adding further woes to consumers who were slapped with record price increases this month.
“We assume inflation exceeds 4% and the South African Reserve Bank hikes 25 basis points in May. For the Bank to hold we would need to assume a sharp reversal in oil prices to the $80s range ahead of the next monetary policy committee (MPC) meeting,” Bank of America says.
“We think it’s too early to determine whether the conflict persists for the rest of the year with oil prices staying above $100 and so we wouldn’t pencil in multiple hikes yet until there is better clarity.”
Bank of America’s forecasts mirror those of Citi, which last week pencilled in 25 bps hikes at the May and July MPC meetings.
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