South Africa's Mbeki quits after ANC withdraws support

By Phakamisa Ndzamela

JOHANNESBURG (Reuters) - South African President Thabo Mbeki on Saturday accepted a demand from his own party to resign, effectively ending a nine-year rule marked by economic prosperity but marred by allegations of abuse of power.

The African National Congress's decision to remove Mbeki, favored by investors for his pro-business policies, capped years of infighting sparked by his 2005 firing of former deputy president Jacob Zuma in a corruption scandal.

Last week a judge dismissed the graft charges against Zuma, now the ANC leader, and suggested there had been high-level political involvement in the case. The ruling spurred pro-Zuma militants within the party to demand Mbeki's head.

Loyalists fought to save Mbeki's presidency but could not sway the party's national executive committee, a key policy-making body stacked with his enemies. It announced his removal in a dramatic press conference outside Johannesburg.

"He didn't display shock or any depression. He welcomed the news and agreed that he is going to participate in the parliamentary process," ANC Secretary-General Gwede Mantashe said as he announced the party's decision.

A few hours later Mbeki announced he would accept his fate.

"Following the decision of the National Executive Committee of the African National Congress to recall President Thabo Mbeki, the president has obliged and will step down after all constitutional requirements have been met," the presidency said in a statement.

A spokesman for Mbeki later told Reuters that the South African leader had decided not to attend the 63rd session of the United Nations General Assembly in New York next week. He had been scheduled to leave on Saturday.

MANUEL TO STAY

The decision to remove Mbeki must be ratified by parliament, a formality given the ANC's two-thirds majority in the assembly.

The resignation may raise political instability in Africa's economic powerhouse 14 years after its transition from the end of white minority rule, although a smooth process to replace him, and reassurances on policy, will ease fears.

Mantashe said the ANC would ask Mbeki's cabinet ministers, including Finance Minister Trevor Manuel -- who is widely respected by markets -- to remain in their positions in the transition period for the sake of stability.

Manuel's office told Reuters he would not step down -- a decision that should calm some investors fears.

Mbeki, who has ruled South Africa since taking over from Nelson Mandela in 1999, was due to leave office in 2009.

He lost the leadership of the ANC to Zuma last year in a bitter leadership battle that further divided the party.