South Africa: South Africa's President Faces Own Scandal As State Capture Probe Ends

South Africa's four-year probe into state capture will be complete when Chief Justice Raymond Zondo submits the concluding part of his findings today. President Cyril Ramaphosa was expected to apply the findings to tackle corruption, but now a separate corruption scandal threatens his own political future. The president is accused of illegally covering up a 2020 theft at his game farm that opponents suspect to be linked to money laundering. His bid for re-election as ANC president in December now hinges on how much incriminating evidence prosecutors find about the case. Meanwhile, the short-term political environment is less conducive for pursing reforms prescribed by the State Capture Commission.

SIGNIFICANCE – REVELATIONS

The Hawks¹ are investigating a criminal complaint against President Ramaphosa that was brought by his former intelligence chief Arthur Fraser on 1 June. Fraser alleged that burglars stole USD4 million that was hidden in furniture on the president's Phala Phala farm, and that his security agents used illegal means to recover the loot and conceal the incident. Local newspapers have investigated and found some of the claims to be true, but Ramaphosa has described the case as 'dirty tricks' by 'those who stand to lose from the fight against corruption'. This is an apparent reference to Fraser and a rival faction in the ruling African National Congress (ANC) that oppose the president's re-election as party president this year.

Top figures in the ANC have been implicated in corruption findings that the State Capture Commission has released since it began probing former president Jacob Zuma in 2018. These include those in Ramaphosa's own circle such as his mining minister and party chairperson, Gwede Mantashe, and his health minister Zweli Mkhize who resigned last year after a corruption scandal. More broadly, the ANC has been found culpable for the decline of key state institutions including South African Airways and Eskom. For example, Zuma associate Dudu Myeni is said to have terminally undermined corporate governance at the national airline after she was appointed to chair its board with no background in aviation (See: South Africa seeks SOE reform as parliament probes airline sale).

These revelations have put pressure on Ramaphosa to initiate systemic reforms, and the conclusion of the four-year probe this week should have marked a milestone in the reform process. However, this has now been marred by Ramaphosa's own Phala Phala scandal with some loss in credibility as a result. Yesterday, for instance, the presidency was compelled to refute any interference with the State Capture Commission's work after the commission's head, Chief Justice Raymond Zondo, failed to present its concluding report to Ramaphosa on 15 June as scheduled.

OUTLOOK – ANC AND ELECTIONS

Our baseline scenario for the outlook is that Ramaphosa will survive the Phala Phala scandal in the short term if the Hawks conclude that there is inadequate evidence to charge the president for a crime, but he will struggle to regain momentum for his re-election bid as ANC president. The party will elect new leaders in December and his foes will likely set further pitfalls in the way before that conference. Implementing recommendations from the State Capture Commission will not be a priority in this context even though the president is required to express a plan of action latest October.

A second scenario is that a criminal charge will force Ramaphosa to step down both as president of the ANC and South Africa, in line with the party's rule that was previously applied to remove key figures in the rival faction such as Elias 'Ace' Magashule. This will prevent the president from standing for re-election in December. A third scenario is that the president will withstand pressure from the public and the opposition, and he will conclusively win a second term as ANC president to lead the party into 2024 general elections. In both of these scenarios, the short-term political environment will still not be conducive to pursuing proposed reforms given the loss in credibility and imminent rancour surrounding the ANC elections.

Footnote

1. The Directorate for Priority Crime Investigation (DPCI) within the South African Police Service.

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