Views : 2nd term for Zuma: ANC divided

The not-so-private life of President Jacob Zuma, a war in South Africa's ruling party and policy vagueness are raising questions over his leadership a year into office and stirring a barely hidden succession battle.

While the World Cup may prove a welcome distraction next month, politicking could undermine economic policy stability and make it even harder to address the growing grievances of restive black townships 16 years after the end of apartheid.

There is no suggestion yet that Zuma will not serve out his full term until 2013, but his chances of a second have certainly diminished just over two years away from the leadership contest in the ruling African National Congress (ANC).

The battle within the ruling alliance involves the Communist Party and labour federation Cosatu, which supported Zuma for the presidency but are disappointed at his failure to change economic policies to give greater benefit to the poor.

Although Zuma has appointed left-wingers to cabinet, overall policy is little different from under his pro-business predecessor, Thabo Mbeki - a fact not lost on markets.

The rand weakened after Zuma became ANC leader in 2007, with investors fearing a radical policy shift, but the currency strengthened after he took office until the eurozone crisis drove money from riskier assets globally.

Although there was no big policy change, investors are still unsure how Zuma can meet promises of better lives for the poor given very modest growth since South Africa emerged from its first recession in 17 years in the third quarter of last year.

"Investors would rather see a much deeper reform of the expenditure and reprioritising, combined with greater competitiveness reform, but a path of tax hikes and greater spending may well be the least worst option," said Peter Attard Montalto, emerging market economist at Nomura International.

It is the affable Zuma's private life, however, that has most shaken those nearest the president.

In January, he defended his fifth marriage as normal for a practising Zulu polygamist but then had to deal with revelations he had a 20th child out of wedlock with a friend's daughter.

Zuma's camp was caught unawares as South Africans of all races criticised his actions. It also undermined the government's safe sex campaign to tackle one of the world's highest HIV and Aids rates.

"He is not good for the ANC's image. Many in the party realise that they have backed the wrong horse," said one senior ANC official, a former ardent supporter who said he was now becoming frustrated with the president's lack of direction.

The party that liberated South Africa from decades of white minority rule elects a new leader in 2012, and Communist Party chief Blade Nzimande - now higher education minister - and Cosatu head Zwelinzima Vavi appear to be lining up for a bid.

Other candidates for the ANC leadership - and by implication the next South African president - could include Tokyo Sexwale, a billionaire businessman who is now housing minister in Zuma's cabinet.

With the most money, Sexwale is in the best position to put up a formidable campaign but he lacks the crucial support from the ANC's left leaning allies.

"Zuma is likely to try and fight for another term and may well be forced to give up more in terms of policy to the left in order to do so," Attard Montalto said.

Zuma can no longer count on the unconditional support of ANC Youth League leader Julius Malema, recently critical of Zuma and fined by the party this month after inflammatory and racially tinged comments. He leads a bloc of 600 000 card carrying members who are often seen as kingmakers in party elections.

But despite having a bad year, political analysts said Zuma's support base among the millions of poor and the ANC's top brass should not be underestimated.

"He will go through for a second term," said Mohau Pheko of consulting company Four Rivers.

"The party is so divided now that he has become the only uniting force. Backing another candidate could only further destabilise the ANC."

Whatever the outcome of the tussle for control, it can only divert attention from the economic policy challenges.

A quarter of South Africans are unemployed, the gap between rich and poor is one of the world's widest. Last year, over one million jobs were lost in mining and manufacturing. More job cuts are forecast for 2010.

The month-long World Cup, which starts on June 11, will provide only a limited boost. Visitor estimates have been cut from 450 000 to 300 000, due to the global financial crisis.

Projections are for an immediate R13-billion cash injection into the local economy, and much larger long-terms gains from improved infrastructure, but many South Africans wonder whether the 40 billion rand cost was worth it.

Almost daily demonstrations in shanty towns to demand better homes, schools and clinics highlight the disaffection.

"When I look at the new stadiums, it makes me angry," said Buhle Ndima, 28, an unemployed mother-of-two from Soweto, a Johannesburg township.

"Why couldn't the government build houses for us instead of fancy stadiums for foreigners?" - IOL

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