MegaBanner-Right

MegaBanner-Left

LeaderBoad-Right

LeaderBoard-Left

Home » Industry News » What will South Africa’s new government be?

What will South Africa’s new government be?

By Chris Hattingh, Centre for Risk Analysis

WITH all the votes counted – and the results announced by the Electoral Commission of South Africa (IEC) on 2 June, the African National Congress has obtained below 50% for the first time in a national election. This time around, the ANC has obtained 40,18%. In 1994 the party obtained 252 seats in the National Assembly (NA); in 2024, 159. From 2019 to 2024 South Africa’s (still) biggest political party suffered a 17-percentage point hit.

The Democratic Alliance (DA) remains the official opposition, with 21,81% (87 seats in the NA). The party performed well in its stronghold, the Western Cape (55%), and grew its vote share in Gauteng (26,63%).

The DA is now involved in post-elections talks with its Multi-Party Charter fellows, as well as (if some reports are to be believed) the ANC. Markets and investors prefer an ANC-DA coalition at national level. In our analysis, a confidence-and-supply arrangement is the best option going forward, for both parties’ longevity as well as for the country’s growth prospects.

For a possible ANC-DA tie up, there are two broad paths ahead: a more formal coalition agreement between the two, along with a host of other parties included. Secondly, a more flexible, negotiated confidence-and-supply arrangement between the two (possibly with the IFP included as well), has come to the fore.

The more formal first option does soothe markets and investors in the short-term, but is not necessarily stable or sustainable, for either party or the country, over the medium to long-term. This path portends a broader tent, but not necessarily a tent that can hang together well, with effective policy-making and executive actions – numerous competing interest groups will be at play.

On the other side of the list of options, we have the confidence-and-supply option. This allows for parties that might diverge very strongly on some core ideological or policy points but provides stability and overlap in terms of priorities of government business. Should the ANC and DA (possibly with the IFP too) take this route, it is likely that the ANC would retain the executive, while the DA would take control of parliamentary positions and duties, such as the speakership and positions in parliamentary committees.

As to the ‘supply’ part of this agreement, it entails that those parties party to the agreement will support crucial items and government business, such as the passing of budgets. Overall, this agreement could be the best of all option to ensure medium-to-longer term government stability, something that markets, investors, and citizens are desperate to see. In this confidence-and-supply agreement, those involved are also able to retain their own identities and ideological and policy values.

In 2004 the ANC obtained 69% – this year, just above the 40% mark. Cyril Ramaphosa now has to oversee and manage the ANC’s coalition and agreement negotiations with a host of other political parties. For the DA, it is also a seminal moment in the party’s history; an opportunity to greatly expand its influence within the government and policy-making spaces. Should it lose sight of its identity and its voters’ concerns values, though, it could become a much less effective force by 2029.

Of the top four largest parties now in South Africa (ANC, DA, MK, EFF) two are more committed to protecting and strengthening the Constitution, rule of law, etc., while the other two would be more comfortable with diluting (or even jettisoning), the Constitution. A confidence-and-supply agreement could provide the ANC and the DA with a path to keeping the country largely on the first path.

To enquire about Cape Business News' digital marketing options please contact sales@cbn.co.za

Related articles

Political analyst says no major surprises at the polls: a coalition not a necessity

The votes have been cast and counted, and the talk has turned to coalitions. However, a coalition is not a necessity or a requirement...

From the “On the Contrary” column – So begins the better news

So there I was in the far corner of the Local Pub and Grill with the Big White Dog, peacefully reading the few pages...

MUST READ

We must protect SA’s groundwater

By Chetan Mistry, Strategy and Marketing Manager at Xylem Africa. THE borehole is a South African staple, accessing water from underground aquifers.  This is called groundwater,...

RECOMMENDED

Cape Business News
Follow us on Social Media