* Winner likely to succeed Zuma as South Africa's president
* Graft allegations shadow Zuma; he denies wrongdoing
* Africa's most industrialised economy struggling
By James Macharia and Zandi Shabalala
JOHANNESBURG, Dec 18 (Reuters) - Battle lines were drawn for South Africa's ANC on Monday as voting began to elect a new leader to succeed President Jacob Zuma as head of a party that has ruled since the end of apartheid but faced scandals and corruption allegations.
The vote is perhaps the most pivotal moment for the ANC since it launched black-majority rule under Nelson Mandela's leadership 23 years ago. With scandal and graft accusations having tainted Zuma's presidency, the party is deeply divided and its image tarnished at home and abroad.
Whoever emerges at the helm of the African National Congress, a 105-year-old liberation movement that dominates Africa's most industrialised economy, is likely to become the country's next president after elections in 2019.
A total of 4,776 delegates began casting their ballots in the early hours of Monday, the ANC said, to select between Deputy President Cyril Ramaphosa and Zuma's preferred candidate, his ex-wife and former cabinet minister Nkosazana Dlamini-Zuma.
The two were the only candidates nominated for the ANC leadership at a conference in Johannesburg on Sunday night.
In a boost to Ramaphosa, courts ruled that officials from some provinces seen as supporting Dlamini-Zuma had been elected illegally and were barred from the conference.
The rand currency gained after that news on Friday, extending its gains to more than 2 percent on Sunday. The currency is expected to be volatile on Monday.
"The rand is stronger on the likelihood of Cyril Ramaphosa being elected ANC head," said Brett Birkenstock, a director at Overberg Asset Management. "The markets favour Ramaphosa and expect him to improve the economy."
A winner had been expected to be announced on Sunday, but owing to long delays, the vote had been pushed back repeatedly. It was not clear when the outcome would be announced.
CLOSE RACE
On Saturday, Zuma announced plans to raise subsidies for tertiary colleges and universities, a move that analysts said was timed to appeal to the more populist members of the party allied to Dlamini-Zuma, the first woman to be nominated as a candidate for the ANC presidency.
Zuma has faced allegations of corruption since he became head of state in 2009 but has denied any wrongdoing.
Ramaphosa, a former trade union leader who later became a businessman and is now one of the richest people in South Africa, has vowed to fight corruption and revitalise the economy, a message that has gone down well with foreign investors.