In Kliptown, morning comes early. By six o’clock, the South African summer sun is sending long shadows across the railway tracks, smoke is rising from the piles of flaming garbage, tinny gospel is blaring from a sound system, men are already drinking and Magdalene Masifako is cleaning her front step.

The 49-year-old part-time cleaner was born when the repressive apartheid regime was at its strongest and moved into her small two-bedroom home 23 years ago – the year white rule ended and the African National Congress (ANC), led by Nelson Mandela, came to power.

Since then, her husband has disappeared and her son has grown up, presidents have come and gone, and free South Africa’s early dreams have soured, but little has changed in her part of Kliptown.

“We only ever see the politicians when they come looking for votes. The big important ones, we only ever see them on TV. Even Mandela – he knew about us and he didn’t change life here,” she says.

A short drive away, all those “big” politicians are meeting in South Africa’s biggest conference hall. Since dawn, coaches have been pulling up outside the sprawling Nasrec centre bringing 5,000 members of the ANC together for the national elective conference, held every five years.

They have come from every corner of the country – Limpopo, Free State, KwaZulu-Natal – to elect a new leader. In the main hall, in the crowded car parks, on sale in the makeshift market outside, there are flags, posters, T-shirts and banners, all in the green, black and gold of the party.

But beyond the colours of the party the delegates share little; the ANC is deeply divided. The run-up to the conference was marred by fistfights, insults and multiple legal challenges as factions scrapped for advantage.

The stakes are as high as they have ever been. The choice made by the conference will determine not just the leader of the party but, given the ANC’s declining but still substantial electoral dominance, the next president of South Africa too. The votes over this weekend will chart the course of the “Rainbow Nation” over coming decades.

The fight to replace Jacob Zuma, the incumbent ANC leader, pits his ex-wife and party stalwart Nkosazana Dlamini-Zuma against Cyril Ramaphosa, deputy president and wealthy businessman. The results may be known as soon as Sunday morning.

Pastor Harry Matapedi outside his church. Photograph: James Oatway/The Observer

The contrast between the two candidates is dramatic. “There is a real choice here. This is not just about two people but about two very different styles of governance,” says Anthony Butler, professor of politics at the University of Cape Town.

Ramaphosa, 65, is personable in public and is the favourite of reformers who prefer a moderate, socially responsible capitalist model. He has much support among the new middle class, while overseas investors see the former union leader with celebrated negotiating skills as more likely to boost South Africa’s flagging economy.

Dlamini-Zuma is distant and uncharismatic, a traditionalist who promises radical measures to redistribute wealth in this deeply unequal country and has much support in rural areas.

“She is going to take the money back from the whites and give it to the people who deserve it. She hasn’t been bought out by white monopoly capitalism,” says Neville Delport, a delegate at the conference from Western Cape.

In Kliptown, as in many urban zones, support is solidly behind Ramaphosa. With unemployment as high as 50% among young people, job creation is of huge importance.

“I am a revolutionary. I have led marches, strikes. This is a revolutionary neighbourhood. But only Cyril [Ramaphosa] is talking about creating work for people, about opportunities for black people to get rich,” says George Mokhala, a 35-year-old self-styled community leader.

Few in Kliptown are unaware of its long history of struggle against prejudice, poverty and oppression. This was where the ANC adopted the Freedom Charter at a mass rally in 1955, affirming its belief in a multiracial, democratic South Africa.

The neighbourhood is part of the urban sprawl of Soweto, site of the famous uprising of 1976 and massive violence in the 1980s as the apartheid regime sought to crush growing protests. Ramaphosa, the son of a policeman, grew up here and was twice imprisoned for his activism.

The roads in much of Kliptown are still dirt, as they were when Masifako first moved in to her small home, and there are no drains. Stolen electricity flows through a tangle of thick cables.

Security guard Bonny Mbecheng. Photograph: James Oatway/The Observer

From the railway footbridge which links Masifako’s small neighbourhood to the rest of Kliptown, new developments are visible: a hotel, a distant mall, concrete pillars commemorating the reading of the Freedom Charter, the skyscrapers of Johannesburg just a few miles away.

Last year the municipality put up a blue plaque on the wall of her home. It describes an illustrious former resident: Charlotte Maxeke, the first black South African woman to get a university degree and the founder of a precursor of the ANC’s Women’s League.

Since then, the rare tour guides who lead their charges into Kliptown have made her home part of their itineraries.

Few of the visitors are locals. “They are all from overseas – usually Europe or the US. The white south Africans don’t come here. They think they will get robbed. But it’s not true. The gates of Kliptown are open. But they are building new walls, in their heads,” said Ntokozo Dube, a local guide.

The scars of apartheid remain livid. Many younger people blame the ANC for “selling out” in 1994, saying that the party should have done more to redistribute wealth. Some even argue that there were more jobs available under racist white rule.

Harry Matapedi, the local Seventh Day Adventist pastor, says those people do not know what they are talking about. “The young people don’t know how it was then … they don’t know about what the ANC has done for us all. Everything is much better. You cannot compare. But our democracy is still young. There were hundreds of years of oppression and then all of a sudden it had gone. People are still getting used to that,” Matapedi, 65, says.

On Saturday Jacob Zuma announced massive state funding to allow most South Africans free university education – a promise which fulfils a key demand of young people but will place a huge strain on public finances.

The bid to win over the youth vote is an understandable political strategy for a leader whose years in power have seen multiple corruption scandals and a widespread sense of betrayal among the two-thirds of the population which is under 35, as well as veterans of the anti-apartheid struggle.

A street scene in Kliptown. Photograph: James Oatway/The Observer

Tokyo Sexwale, who was imprisoned with Nelson Mandela in the 1980s and was once seen as a presidential candidate before making a career as a successful businessman, said that the plight of the party was “depressing”.

“No right-thinking person who loves the ANC could be happy at where we are now,” says Sexwale, a non-voting delegate at the conference. “We are living on hope. We have to come together here, make the right decision for 50 million South Africans. If we fail, the lights will go out one after another for the ANC.”

The people of Kliptown will be watching the announcement of the results of the leadership vote on televisions running off their illegal power connections – in the makeshift bars, at home, or in the street.

Bonny Mbecheng, a 33-year-old security guard who earns a 150 rand (£8) daily wage, will be working in a car park under Kliptown’s Freedom Square, where the famous charter was read.

“These politicians are fighting each other, eating each other like dogs. I am trying to earn enough for my family to have some dinner,” he says. “I want a leader who can help me, wipe my tears, say: ‘No Bonny, don’t cry, there is freedom.’”