Ramaphosa survives 'Farmgate' scandal to stay at helm of South Africa's ruling ANC

By Kopano Gumbi, Alexander Winning and Tim Cocks

JOHANNESBURG (Reuters) -South African President Cyril Ramaphosa was re-elected leader of the ruling African National Congress (ANC) on Monday, overcoming a scandal over cash hidden on his private farm and paving the way for him to run for a second term in 2024.

While markets welcomed the news as a sign of continuity in economic policy, Ramaphosa now faces the task of rebuilding support for the corruption-tainted ANC amid crippling power cuts that have hurt business and exacerbated rampant unemployment.

Ramaphosa's political future had been hanging by a thread earlier this month after a panel of experts issued a report saying preliminary evidence suggested he may have violated the constitution over a stash of foreign currency hidden in furniture at his game farm.

He has denied any wrongdoing over the scandal, dubbed "Farmgate" by the media, and challenged the report in court. He has not been charged with any crime, but some opponents had called for his resignation.

At a party gathering in Johannesburg, Ramaphosa beat former health minister Zweli Mkhize by around 57% to 43% in a ballot to secure a second five-year term as ANC leader. Many of his allies also took many top seats in the party leadership.

Africa's most industrialised country holds its next general election in 2024. In municipal elections in 2021 the ANC won less than 50% of the vote for the first time since taking power at the end of white minority rule in 1994.

The announcement of Ramaphosa's victory on Monday was greeted with wild cheers in the conference hall from his supporters clad in ANC-branded tracksuits, T-shirts, caps and jackets in the party's black, green and gold colours.

Ramaphosa and Mkhize shook hands on stage after the results were announced, as delegates sang, danced and whistled to celebrate the result.

Mkhize was health minister during the COVID-19 pandemic, until Ramaphosa put him on special leave last year over after allegations that his department irregularly awarded contracts to a communications company controlled by his former associates.

Mkhize has denied wrongdoing over the contracts.

In other ballots, ANC chairman Gwede Mantashe retained his position while Fikile Mbalula was elected secretary-general, the official in charge of the day-to-day running of the party.

The ANC's "Top 7" group of highest officials is now more staunchly pro-Ramaphosa than the group that emerged from the 2017 conference where Ramaphosa won the top job for the first time.

Ramaphosa's only overt opponent in the Top 7 is first deputy secretary-general Nomvula Mokonyane. But her influence will be limited by the fact that the secretary-general and second deputy secretary-general are Ramaphosa backers.

"The outcome of the 2022 conference has broken the political impasse that arose in the 2017 conference and signals a near obliteration of internal opposition to the ... agenda that President Cyril Ramaphosa has been championing," said Ongama Mtimka, lecturer and political analyst at Nelson Mandela University.

Daniel Silke, director of Political Futures Consultancy, said on Twitter that the outcome marked some continuity for the ANC "but the same old issues will bedevil the organization and any renewal remains illusive without best-practice policy and governance."

ECONOMIC CONTINUITY

The ANC has won a majority of seats at every general election since multi-racial elections began in 1994, but its support has been waning. Ramaphosa's supporters see him as the best candidate to halt the party's electoral slide.

"I'm very happy," said Chana Pilane-Majake, a delegate from Gauteng province, where Johannesburg and the capital Pretoria are located, pausing after a chorus of singing and clapping after Ramaphosa was declared the winner.

"We admit it has not been perfect over the past five years. ... That's why (he) needs a second term: to conclude what has been started."

Siphiwe Mazibuko, a delegate from KwaZulu-Natal (KZN) province, home to many Ramaphosa opponents and the home turf of former president Jacob Zuma, called for party unity after the vote.

"Zweli Mkhize was my preference," Mazibuko said. "But we accept the result. Now it's over the party needs to be united."

Finance Minister Enoch Godongwana told reporters Ramaphosa's re-election pointed to continuity in economic policy.

Cristian Maggio, head of portfolio strategy at TD Securities in London concurred, saying "this is positive from a market viewpoint as it safeguards (the) status quo against the negatives of a potentially more populist policy had Ramaphosa lost."

(Additional reporting by Nqobile Dludla in Johannesburg, Wendell Roelf in Cape Town and Shreyashi Sanyal in Bengaluru; Writing by James Macharia Chege; Editing by Toby Chopra and Hugh Lawson)