ANC President Cyril Ramaphosa. Picture: MASI LOSI
ANC President Cyril Ramaphosa. Picture: MASI LOSI

The rand, which has been roaring along since Cyril Ramaphosa was elected ANC president to succeed Jacob Zuma in December, seems to have run into the quicksand of reality.

Since Ramaphosa narrowly defeated Nkosazana Dlamini-Zuma, the rand has rallied from around R13.60/dollar, to around R12.23. But in recent days, it has slipped back to around R12.40, as the initial exuberance over Ramaphosa’s victory gave way to the realisation that the odds of new market-friendly policies are hostage to a deeply divided ANC national executive committee (NEC).

So we see a revival of the tedious talk about "nationalising" the Reserve Bank, fee-free education and expropriating land — rather than details of Ramaphosa’s much-touted Roosevelt-style "New Deal" to spark growth and create jobs.

Ratings agency Fitch has warned that Ramaphosa’s plans may be curtailed by "policy paralysis", given his divided NEC.

But if he is able to demonstrate early signs of action — for example, if Zuma is recalled and the cabinet reshaped as Ramaphosa would want — this would be a sign that paralysis won’t happen.

And from there, a recovery in GDP growth to 1.6% this year and 2% next year is a real possibility. And once the economy gains momentum, Ramaphosa’s ability to silence his opponents in the ANC will be that much greater.