The local currency raced to R12.60 against the dollar after the top six officials were announced - it was bid at R12.82 at 5pm.
John Ashbourne, an Africa economist, said the results of the other positions meant there were divergent views on policy: “The new leader’s first task will be papering over divisions at all levels - Ramaphosa failed to get one of his allies elected as deputy leader, meaning that the top leadership of the party will remain divided.
“Secondly, it is far from clear that Ramaphosa has solutions to South Africa’s many structural problems. While investors welcomed him as the best option available, there is little sign that he is a convinced reformer,” Ashbourne said.
The rand had already jumped by 4.5percent against the US dollar over the course of the day following rumours that Ramaphosa had performed well at the conference.
Ramaphosa was seen as the more investor-friendly of the two main candidates, vying to lead the ruling party.
During the campaign, he promised to clean up corruption within the ruling party and to work with businesses and labour to boost economic growth.
Gillian Parker, an analyst at Control Risks, said South Africa’s “radical economic transformation” agenda has fuelled antagonistic rhetoric towards foreign commercial interests, adding to uncertainty and dislodging more substantive policy reform.
“The divisions laid bare within the dominant party will not heal quickly: political uncertainty will extend into 2018, as both factions differ considerably on key policy issues,” Parker said.
The election result meant that the ANC president will not simultaneously be head of state.
President Jacob Zuma had thrown the spanner in the works for the incoming ANC president when he announced free-education plans on the eve of the conference.
Sizwe Nxasana, the chairperson of the National Student Financial Aid Scheme, confirmed during a Talk Radio 702 interview that his organisation does not have information on how free education will be funded.
“Ratings agencies are obviously watching which way the country is going, especially in terms of fiscal discipline.
“The statement that came out on Saturday from the Treasury indicates that while the government will increase financial aid to students in the form of free education for those who come from poor backgrounds they committed to do this within fiscal consolidation and discipline.
"Obviously, the proof of the pudding is still yet to be seen,” said Nxasana.
Meanwhile, Asief Mohamed, the chief investment officer at Aeon Investment Management, said he does not see the free-education plan being implemented in 2018.
“President Jacob Zuma has created a quagmire by by-passing both cabinet and national treasury when he announced his plan. I doubt it will be implemented, because it has to first follow the correct processes of government first,” Mohamed said.
The Department of Higher Education and Training estimated the plan would add R12.4billion to the cost of tertiary education.
The announcement has largely over-ridden the Heher Commission, which suggested various alternatives to providing free education to all students in need, including government-guaranteed bank loans.
Tumisho Grater, an economic strategist at Novare Actuaries, said it will be challenging for fiscal policy to provide any meaningful or sustained boost to economic growth.
“While the outcome of the elective conference is an important one in terms of policy direction, a change in leadership will not immediately heal the years of economic ills.
“This sentiment was echoed by S&P Global Ratings when they decided to downgrade the country’s local currency rating to junk status a few weeks ago,” Grater said.
- BUSINESS REPORT