(Bloomberg) — A robbery that took place at South African President Cyril Ramaphosa’s game farm more than two years ago and came to light this month has ignited a political storm six months before he’s set to seek re-election as head of the governing party.
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The former head of the State Security Agency, Arthur Fraser, last week alleged that Ramaphosa concealed the theft of more than $4 million from his farm in the northern Limpopo province in February 2020 and that the suspects were illegally detained and interrogated. On June 2, Ramaphosa’s office confirmed the robbery took place and said he reported the matter to the police for investigation. Over the weekend, the president said the amount taken was much less than Fraser claimed and denied any wrongdoing.
“Some are casting aspersions about me and money,” Ramaphosa said in remarks posted on his Twitter account. “I want to assure you comrades that all this was money from proceeds from selling animals. I have never stolen money from anywhere, be it from our taxpayers, be it from anyone.”
Even so, Ramaphosa’s foes within the governing African National Congress will seize on the allegations to try and stymie his bid to win another five-year term as party leader at its elective conference in December. Under the ANC’s rules, officials facing criminal charges must vacate their positions until they have been cleared by legal proceedings.
Ramaphosa, a lawyer and one of the richest Black South Africans, hasn’t been charged with any crime. He has identified the fight against graft as a top priority since he took office in 2018.
Those making the allegations “have their own political agenda and we are all aware of that,” he said. “It will not deter me from fighting corruption.”
The cash that was stolen was hidden inside furniture on Ramaphosa’s farm, Johannesburg’s Sunday Times newspaper reported, citing legal documents Fraser filed with the police. Ramaphosa hasn’t provided details of how the theft occurred, how much was involved and why the money wasn’t deposited in a bank.
Deputy State Security Minister Zizi Kodwa told the state broadcaster that the police are investigating the matter. Athlenda Mathe, a spokeswoman for the South African Police Service, didn’t immediately respond to a voice mail and a text message requesting comment.
Rand Strengthens
The furor has so far elicited little reaction in the financial markets, with the rand gaining as much as 1.5% against the dollar on Monday.
“Let’s allow the police and judiciary to do their job,” said Cristian Maggio, head of emerging-market strategy at TD Securities in London. “I don’t think this poses a great risk,” though there may be some impact going forward, he said.
Ramaphosa removed Fraser as head of state security in April 2018 after an opposition party laid corruption charges against him. Fraser is seen as an ally of Ramaphosa’s predecessor, Jacob Zuma, who’s nine-year rule was marred by allegations of large-scale state corruption. In September 2021, Fraser granted medical parole to Zuma after he had served less than two months of a 15-month sentence for contempt of court.
“The Zuma backers are trying to get rid of Ramaphosa. If they succeed it will not be good, particularly if Zuma supporters get back in,” said Mark Mobius, a veteran emerging-markets investor and co-founder of Mobius Capital Partners. “The ANC election will be crucial in pointing us to the direction of political developments in South Africa.”
Opposition parties are capitalizing on Fraser’s revelations.
John Steenhuisen, the leader of the main opposition Democratic Alliance, said the allegations illustrated how ANC infighting and factionalism were destabilizing the state. The DA will request the national tax agency to determine whether the sum that was stolen was declared, and ask the South African Reserve Bank to ascertain whether there was any illicit flows of foreign currency, he said.
“The president is facing a crisis of credibility and cannot hide behind procedural smokescreens to avoid presenting South Africans with the full truth around the money that was stolen from his farm and the subsequent cover-up,” Steenhuisen said. “Too many questions remain unanswered. How much money was kept on the farm and in what currency? How much of it was stolen? How did this foreign currency get into the country? How long was it stored on the President’s property? Were the correct exchange controls observed? And does the president still hold foreign currency at his farm or any of his other properties?”
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