South Africa witnesses end of ANC dominance

0
African National Congress, ANC, South Africa, African National, Cyril Ramaphosa, Paul Mashatile, BRICS, GDP, Al-Jama-ah, Inkatha Freedom Party, Patriotic Alliance, uMkhonto weSizwe Party, Economic Freedom Fighters
Image credit: South China Morning Post

Future historians might look back on May 2024 as a pivotal moment in South Africa’s post-apartheid history, marking a potential shift with both domestic and international implications. The elections held on May 29 signaled the end of the African National Congress’s (ANC) era of political dominance, a significant change after six national ballots since 1994 where the ANC consistently secured more than 50% of the vote. This development suggests the beginning of a new era of co-governance, accompanied by new uncertainties.

The ANC, while still the largest party, faces a landscape with a growing number of opposition movements. Over 50 parties registered for the 2024 election, a record number, and independent candidates were allowed to stand for the first time. This fragmentation indicates a possible end to the ANC’s unilateral control, raising the likelihood of coalition governments and complex political negotiations.

A potential minority government led by the ANC could emerge, but this would likely constrain its ability to implement policies and pass legislation. To maintain governance, the ANC might need to form coalitions with other parties under President Cyril Ramaphosa or possibly his successor, such as Deputy President Paul Mashatile, should Ramaphosa step down or face a leadership challenge.

Upon confirmation of the final election results, the ANC will have 14 days to form a government before the new parliament convenes to elect a president. The speed and success of coalition formation will be a critical indicator of the political gridlock that might ensue in the coming years.

Domestically, this political shift is significant, but its international ramifications could be equally profound. South Africa’s economy, the largest on the continent with a gross domestic product of about US$370 billion, has underperformed significantly in the past decade or two. Its GDP is roughly one-fiftieth that of China, despite both nations being members of the BRICS group of emerging markets alongside India, Russia, and Brazil. This stark contrast underscores the diverging economic trajectories among BRICS members, with China and India experiencing robust growth, while South Africa, Brazil, and Russia lag behind.

A pressing question is whether South Africa can reverse its economic decline. According to the World Bank, the nation’s economy has regressed over the past 15 years, with per capita GDP falling from a peak in 2011. This decline has led to a substantial drop in living standards, making the population over 20 percent less well-off on average. Additionally, about a third of the labor force is unemployed, the highest rate among countries monitored by the World Bank. Income inequality is also exceptionally high, with over 18 million people on welfare benefits compared to about 7 million taxpayers.

This economic malaise has resulted in South African-listed firms being valued at a discount relative to those in other key emerging markets, presenting a potential opportunity for investors, albeit with considerable political risk. The nature of the ANC’s co-governance will significantly influence the economy in the coming years. Prior to the election, there was optimism within the business community that the ANC would win close to 50 percent of the vote, enabling it to co-govern with smaller parties such as the Inkatha Freedom Party, the Patriotic Alliance, or the Muslim party Al-Jama-ah.

However, the ANC underperformed even these reduced expectations, possibly necessitating a coalition with a larger party like the business-friendly Democratic Alliance, which took second place in the ballot. This scenario raises concerns among investors that the ANC might instead collaborate with the leftist Economic Freedom Fighters, led by the radical Julius Malema, and/or former President Jacob Zuma’s uMkhonto weSizwe Party. These parties propose policies like land expropriation without compensation and the nationalization of the central bank, potentially reversing the early signs of economic reforms initiated by Ramaphosa.

The broader political landscape is marked by fragmentation along identity lines. The ANC, once a symbol of the “rainbow nation,” now primarily garners support from the 80% black majority population. No major political group currently reflects the multiracial reality of South Africa, which also includes significant populations of white, Indian heritage, and biracial individuals.

Thus, the 2024 election has ushered in a period of political and economic uncertainty, with various possible trajectories for South Africa in the second half of this decade. The key variable will be which, if any, political partners the ANC chooses to help govern Africa’s largest economy.

LEAVE A REPLY

Please enter your comment!
Please enter your name here