Mbeki is popular among investors who praise his pro-business policies. But he is on thin ice with powerful trade unions and other supporters of ANC leader Jacob Zuma, who accuse Mbeki of trying to undermine the man who replaced him as party boss.
Mbeki is barred by the constitution from a third term as state president.
The move to oust him picked up speed after a judge last week threw out corruption charges against Zuma and said there was high-level meddling in the case. Zuma’s camp have branded the prosecution a political witchhunt by Mbeki and his aides.
Zuma has said he wants Mbeki to serve out the remaining months of his term, but he faces a growing chorus within the African National Congress to force Mbeki to resign or push him out in a no-confidence vote in the ANC-dominated parliament.
The party’s national executive committee (NEC), a powerful policy-making body controlled by Zuma allies, began meeting on Friday and an announcement on the outcome is expected on Sunday.
"Zuma will have to listen to all viewpoints, but it is unlikely that the NEC will rescue Mbeki," South Africa’s Business Day newspaper quoted an unnamed NEC member as saying.
Forcing out Mbeki, credited by the business community for policies that have spurred nearly a decade of economic growth, would create uncertainty among investors.
It could prompt the exodus of loyal ministers, possibly including the popular finance minister, Trevor Manuel. And it would further divide the party that has governed South Africa since the end of white minority rule in 1994.
"If there are significant developments with Mbeki resigning and his cabinet following suit, that could lead to high political risk attached to South Africa," said George Glynos, managing director of South Africa’s ETM market analysis firm.
There is speculation that a pro-Mbeki faction could split off from the ANC and contest general elections in 2009 separately. Most analysts, however, expect the ruling party to remain intact and win another landslide victory next year.
The ANC consistently wins about two-thirds of the vote in national elections. Reuters