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South African President Jacob Zuma speaks during the African National Congress conference in Johannesburg on Dec. 16, 2017.

MUJAHID SAFODIEN/AFP/Getty Images

South African President Jacob Zuma has conceded that a judicial inquiry must investigate his controversial relationship with the wealthy Gupta family, the latest sign of his rapidly waning power as opponents prepare to push him out of office.

Mr. Zuma's term of office doesn't expire until mid-2019, but there are growing signs that he will be pressured into resigning within months or weeks as investigators move closer to the corruption allegations that surround him and his allies.

Deputy president Cyril Ramaphosa, the newly elected leader of the ruling party, is increasingly taking charge of the levers of power in South Africa, vowing to launch a "mammoth" clean-up of corruption and mismanagement.

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On Thursday, he took aim at one of Mr. Zuma's most cherished projects, a hugely expensive plan for nuclear reactors, which Russia's nuclear agency was expecting to build. "We've got excess power right now, and we have no money to go for major nuclear-plant building," Mr. Ramaphosa said in Davos at the World Economic Forum, making it clear that the project is dead.

Investors are enthusiastic about the dramatic political changes. South Africa's currency, the rand, was trading at 11.8 to the U.S. dollar on Thursday, its strongest rate in almost three years. It has become one of the world's best-performing currencies over the past three months, with its value jumping by 15 per cent, largely on investors' belief that Mr. Ramaphosa will tackle corruption and reform the economy.

The national executive of the ruling African National Congress has begun to debate the timing of Mr. Zuma's resignation from the presidency, with the ANC's top six officials delegated to negotiate with him. The decision signals his growing weakness, since his allies on the executive had never permitted this debate in the past.

Mr. Ramaphosa has taken a magnanimous tone, saying that Mr. Zuma must not be "humiliated" in the handover but making clear that the ANC is in charge of the decision.

In Davos on Thursday, Mr. Ramaphosa promised that South Africa's prosecuting agency will pursue criminal charges in corruption cases "in tandem" with the judicial inquiry into corruption.

The inquiry will examine the Zuma government's allegedly corrupt relationship with the Gupta brothers, who control a business empire in mining, media, technology and other industries. One of their business partners is Mr. Zuma's son, Duduzane.

The terms of reference, released on Thursday, show that the Guptas and their political influence will be the inquiry's main focus. It will probe whether the Guptas profited from state tenders by controlling top appointments at state-owned enterprises. And it will look at explosive allegations that the Guptas used bribes to influence the appointment of ministers in Mr. Zuma's cabinet.

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The inquiry will have a deadline of six months, although this could be extended. It will be headed by Raymond Zondo, deputy chief justice of South Africa's highest court, the Constitutional Court.

The inquiry was recommended in 2016 in a major report by anti-corruption investigator, Thuli Madonsela, who at the time was South Africa's public protector, similar to an ombudsman.

Mr. Zuma has used legal challenges to stall the inquiry for the past 14 months. Even when he finally announced the inquiry two weeks ago, he wanted to dilute it by widening its scope drastically to encompass "all those who may have rendered our state vulnerable to control by forces other than the public." But on Thursday he conceded that the inquiry should focus on his government and the Guptas.

The ANC praised the terms of reference, saying that the inquiry should work speedily and "leave no stone unturned."

The biggest opposition party, the Democratic Alliance, also welcomed the terms of reference. "For too long, the Gupta family has had a stranglehold over the South African government, and particularly over President Zuma," it said. "For years, President Zuma has been trying to frustrate efforts to hold him accountable."

The Guptas, meanwhile, are facing tough action by South African prosecutors, who froze some of the Gupta bank accounts last week. The prosecutors allege that the Guptas helped orchestrate a criminal scheme in which about $25-million in government money was diverted into a fictional farm project and then immediately pocketed by the Guptas and their associates.

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In a separate move, Mr. Ramaphosa has launched a major overhaul of the state-owned electricity monopoly, Eskom, including the appointment of a new board of directors.

In parliamentary hearings this week, MPs heard evidence that the Guptas had paid for travel and luxury hotel rooms for Eskom executives during trips to Dubai, where the Guptas spend much of their time.

Mr. Ramaphosa, in Davos for his first venture on the global stage since replacing Mr. Zuma as leader of the ruling party last month, openly criticized the mismanagement of the Zuma years and promised "seismic" changes. The ANC is now being "brutally honest with itself in terms of acknowledging some of the missteps that we have made," he said in a speech this week.

"Many people who may well have wanted to invest in our country look at us and say, 'This is another corrupt country and we're not going to invest,' " he said. "We are going to be absolutely determined to root out corruption in our state-owned enterprises."

Earlier in the week, he pledged a massive reform of the government. "Cleaning up, clearly, is going to be quite a mammoth task, but we have to start somewhere," he told Bloomberg Television.

"Our people are clamouring for a clean government, and that is what we are going to give them. … It is not like last year, or a year ago, when we were all over the show. We've got a game plan."

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