Thabo Mbeki, South Africa’s beleaguered president, agreed to stand down on Saturday after a midnight putsch by the leaders of the ruling African National Congress.

The ousting of Nelson Mandela’s successor – the first time a sitting president has been removed in South Africa’s 14-year democratic history since the demise of apartheid in 1994 – offers no guarantee of an end to the political turmoil that has plagued the country for months

”After a long and difficult discussion, the ANC decided to recall the president of the republic before his term expires,” Gwede Matashe, ANC secretary-general, told a packed press conference in Johannesburg on Saturday afternoon. ”Our decision has been communicated to him.”

Africa’s biggest economy – already slowing and subject to R18bn portfolio outflows this year as risk-averse investors flee amid see-saw political instability – now faces a further period of doubt over who is at the helm of the country.

The final months of Mr Mbeki’s second and final tenure in office, which was scheduled to end at elections due by the middle of next year, have been engulfed in a power-struggle between his backers and the newly ascendant ANC wing fronted by Jacob Zuma, who wrested the party leadership from his former ally in December.

The catalyst for removing Nelson Mandela’s successor was last Friday’s court ruling dismissing corruption charges against Mr Zuma, which gave a damning – if untested – account of Mr Mbeki’s part in ensuring that prosecutors pursued the man he fired as vice president in 2005.

Since then, Mr Mbeki’s position has appeared increasingly untenable – despite the entreaties of some within the ANC who argued that a coup would only sharpen divisions within the party.

Amid febrile speculation following the outcome of the all-night deliberations of the ANC’s 86-strong national executive committee, the presidency issued a statement: ”Following the decision … to recall President Thabo Mbeki, the president has obliged and will step down after all constitutional requirements have been met.”

It was not immediately clear, however, whether ”constitutional requirements” meant forcing the party to trigger a potentially divisive vote of no confidence in parliament.

As Mr Mantashe observed, ”the constitution is silent” on a presidential resignation or removal and parliament, where the ANC holds a commanding majority, will have to concoct a solution.

For now, Mr Mbeki remains in charge. But should he resign or be pushed out by parliament, Baleka Mbete, the speaker and a Zuma ally, is expected to lead an interim administration ahead of the ballot as scheduled. Mr Zuma, who due to the ANC’s electoral dominance is all but certain of triumphing, cannot be immediately elevated to the highest office because he is not an MP.

Mr Mantashe said the party would make ”space” for Mr Mbeki to continue his mediation efforts in Zimbabwe, where the rival factions are once again deadlocked following a power-sharing deal that was agreed last week.

Investors and business leaders will now be watching to see whether Mr Mbeki’s conservative economic stance will be swept aside along with his presidency. A senior ally of Mr Zuma recently told the Financial Times that the new, left-leaning dispensation in the party and the unions and communists with which it governs would seek ”a complete review of the conservative strategies that we’ve pursued - all of them” once in government.

A barometer of the future direction of economic policy will be the fate of Trevor Manuel, the world’s longest-serving finance minister widely seen as the architect of years of steady growth in the Mbeki era. Thoraya Pandy, Mr Manuel’s spokeswoman, told the Financial Times after the ANC decision: ”He’s not resigning … he’s aware that investor sentiment is important, whether they place it in him or in the ANC in government.” Mr Zuma is lobbying other members of the Mbeki cabinet to remain in their posts, although the deputy president has signalled she would follow Mr Mbeki out of the door.

After months of paralysis, rumour and infighting, Mr Mantashe said investors should take heart that the party had made a decision. ”We want the market to be sure and certain about where we are going. If there is certainty, it can mitigate the risk that goes with the vulnerability of the economy,” which is carrying a precarious 9 per cent current account deficit, leaving it exposed to sudden withdrawals of foreign exchange.

”I would expect the initial reaction to be some weakness in the currency,” said Jeff Gable, head of research at Absa Capital. ”But ultimately this change should allow a group of people to coalesce around Zuma and give us a better sense of policy after the next elections sooner than we would have had.”

Mr Mbeki has cancelled his visit to New York on Sunday for the UN General Assembly. South Africa currently sits on the Security Council.

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