In the most dramatic political crisis since apartheid ended in 1994, the ANC announced on Saturday it had recalled Mbeki before his term ends. He agreed to step down a few hours later.
The move exposed the worst internal crisis in the history of the African National Congress and increased the chance it could split before next year’s election, which Zuma is expected to win because of the party’s electoral dominance.
It shows the growing strength of the ANC’s more radical wing, which may hurt Zuma’s efforts to reassure foreign investors that left-leaning allies will not force him to steer the country away from pro-business policies.
The precedent could also be a dangerous one for Zuma himself if he fails to fulfill the hopes of his allies on the left.
"Labour and the left is in a stronger position then when it was six months ago," said Nic Borain, political consultant to HSBC Securities. "This victorious triumphalism hurts the country. It is bad for business."
ANC militants led the charge against Mbeki after a judge threw out graft charges against Zuma and suggested there was high-level political meddling in the case.
ANC Secretary-General Gwede Mantashe repeatedly said during the announcement the decision to recall Mbeki, who lost the ANC leadership to Zuma in December, was made by consensus and was designed to ensure political stability.
But analysts have their doubts.
While the move vindicated Zuma, it may have caused irreparable damage to the ANC and deprived him of the chance to take over Africa’s biggest economy backed by a united party after a transitional government.
Party sources said deputy ANC leader Kgalema Motlanthe would be named interim president until the election.
The ANC’s base of support ranges from radical leftists to business tycoons. But it has been in crisis for several years due to the infighting between the Zuma and Mbeki camps, in sharp contrast to when party leaders were united against apartheid.
Mbeki’s brother, Moeletsi Mbeki, a political analyst who has been a tough critic of Mbeki, was quoted in a newspaper as saying the ANC’s purge was a "recipe for civil war" that set a dangerous precedent.
Uncertainty may deepen if Mbeki supporters split from the ANC and contest elections as a breakaway party in 2009, as media reports suggest they will.
Defence Minister Mosiuoa Lekota, Deputy Defence Minister Mluleki George and other Mbeki loyalists are planning to start a new party and organizers will meet this week to discuss the move, South Africa’s Sunday Times reported.
"The threat of a breakaway party is now significant. Its implications would be grave," said Razia Khan, regional head of research Africa at Standard Chartered
"The ANC remains the dominant party in South Africa, but any exodus of a large number of centrists would leave party policy even more at the mercy (potentially) of more radical influences."
Finance Minister Trevor Manuel, widely respected by the market, will not resign, his office said on Saturday.
Although there is little doubt that Zuma would win the presidential election, losses in parliamentary elections could weaken the ANC’s overall grip.
Zuma’s internal ANC challenges are stacking up as he faces pressure from his powerful allies in powerful trade unions and the small but influential South African Communist Party who helped him defeat Mbeki in the party leadership race.
Zuma has promised them that he will do what Mbeki failed to.
But easing poverty and social ills may not be easy, especially since more government spending would ring alarm bells among foreign investors who want tight fiscal policy.
Mbeki’s removal coincides with a slowdown in South Africa’s economy, which is struggling to contain inflation and an electricity crisis.
Aside from poverty, Zuma has yet to spell out how he will deal with one of the world’s highest rates of violent crime and an AIDS epidemic ravaging millions of South Africans.
"The main challenge is trying to end long-term uncertainty. If he can make progress in the fields of service delivery and unemployment and education it could go a long way," said Mike Davies, Middle East and Africa analyst at Eurasia Group.
Tackling these overwhelming issues will require the backing of a strong and united ANC.
If Zuma fails to take control of the ANC, he could end up being a front or instrument for one faction or another, analysts said. Zuma’s trademark charisma and charm may not be enough to keep any new ANC hatchet men at bay if he disappoints them.
In deposing Mbeki, ANC hardliners sent an unmistakable message to Zuma and any other future party leaders.
"They are saying ‘we can recall any president’," said Nel Marais, a political analyst at Executive Research Associates.