Deputy Leader of South Africa’s EFF Quits, Joins Zuma’s Party

(Bloomberg) -- The deputy leader of South Africa’s Economic Freedom Fighters quit on Thursday, dealing a blow to a party that has unnerved financial markets with its calls to expropriate land and nationalize mines and banks.

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Floyd Shivambu will now join former President Jacob Zuma’s uMkhonto weSizwe Party, which displaced the EFF as the third-largest in May 29 elections.

Other EFF members who are loyal to Shivambu are also expected to leave and preparations should be made for their exit, party leader Julius Malema told a press briefing in Johannesburg on Thursday.

Malema and Shivambu formed the EFF in 2014 after falling out with the African National Congress, and its left-leaning policies won it support among many young, black township residents.

The ANC, which ruled the country outright for three decades, lost its parliamentary majority in May, and there were fears among investors that it would enter into an alliance with the EFF, triggering capital flight. But the ANC iced out both the EFF and Zuma’s party, and instead entered into an alliance with 10 other mostly business-friendly parties.

Shivambu’s departure comes ahead of the EFF’s elective conference, which is scheduled for December, and where the party’s Secretary-General Marshall Dlamini was expected to challenge him for the No. 2 post. Shivambu has shouldered blame for the EFF losing support in the last national vote, because he was tasked with shoring up its support in the second-most populous province of KwaZulu-Natal, but failed to do so.

Shivambu’s brother, Brian, was implicated in an ongoing investigation into the collapse of VBS Mutual Bank in 2018. More than 1.9 billion rand ($105 million) was looted from its coffers by politicians and their friends at the expense of hundreds of mostly rural people who had banked their life savings with the institution.

Tshifhiwa Matodzi, the bank’s former chairman, who turned state witness implicated the EFF in an explosive affidavit, saying that at least 16 million rand was paid to the party through a front company owned by Shivambu’s brother. The Shivambus and the party deny wrongdoing.

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