The African National Congress (ANC) party lost its parliamentary majority in a historic election result on June 1 that puts South Africa on a new political path for the first time since the end of the apartheid system of white minority rule 30 years ago.
With more than 99 per cent of votes counted, the once-dominant ANC had received just over 40 per cent in the May 29 election, well short of the majority it had held since the famed all-race vote of 1994 that ended apartheid and brought it to power under Nelson Mandela. The final results are still to be formally declared by the Independent Electoral Commission (IEC) that ran the election, but the ANC cannot pass 50 per cent. At the start of the election, the commission said it would formally declare the results by June 2, but that could come earlier.
The ANC must now either negotiate a coalition government or at least persuade other parties to back Ramaphosa’s re-election in parliament to allow him to form a minority government reliant on other parties for support to pass budgets and legislation. Parliament elects the South African President after national elections.
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“We have been talking with everybody even before the election,” ANC’s deputy secretary general Nomvula Mokonyane said, saying the party’s decision-making body would meet to decide on a course of action after final results are announced. “It’s about ensuring that the stability both in government and stability in our country. ”She would not be drawn on whether the party might replace Ramaphosa after the party’s record poor showing, saying: “For now, it’s not an issue.”
‘Momentous breakthrough’
While opposition parties have hailed the result as a momentous breakthrough, the ANC remained the biggest party by some way. “The way to rescue South Africa is to break the ANC’s majority and we have done that,” said main opposition leader John Steenhuisen. The way forward promises to be complicated for Africa’s most advanced economy, and there’s no coalition on the table yet.
Steenhuisen’s Democratic Alliance (DA) party was on around 21 per cent of the vote. The new uMkhonto weSizwe Party (MKP) of former President Jacob Zuma, who has turned against the ANC he once led, was third with just over 14 per cent of the vote in the first election it has contested. The Economic Freedom Fighters (EFF) was in fourth with just over 9 per cent.
More than 50 parties contested the election, many of them with tiny shares of the vote, but the DA and MKP appear to be the most obvious for the ANC to approach, given how far it is from a majority. Which coalition the ANC pursues is the urgent focus now, given Parliament needs to sit and elect a President within 14 days of the final election results being officially declared. A flurry of negotiations are set to take place and they will likely be complicated.
Impact on financial markets
For financial markets, ANC’s choice of partner is key, as both MKP and the EFF have laid out demands that everything from land to banks be nationalised and the prospect of them joining the government has spurred a sell-off in the rand and the nation’s bonds. An alliance with the DA would likely accelerate economic reforms and privatisation initiatives that President Cyril Ramaphosa had begun to put in place.
Ramaphosa’s allies prefer an investor-favoured pact with the business-friendly DA, which would keep him at the helm, according to people familiar with the situation. Some of his detractors in the party favour one with EFF and MKP, which could see Ramaphosa ousted or resign.
Leader of the main opposition Democratic Alliance John Steenhuisen (right) shakes hands with ANC’s chairman Gwede Mantashe (left) at the IEC results centre in Midrand on May 31. President Ramaphosa’s allies prefer an investor-favoured pact with the business-friendly DA, which would keep him at the helm, according to people familiar with the situation. | Photo Credit: THEMBA HADEBE/AP
Steenhuisen has said his centrist party is open to discussions. The MKP said one of their conditions for any agreement was that Ramaphosa is removed as ANC leader and President. That underlined the fierce political battle between Zuma, who resigned as South African President under a cloud of corruption allegations in 2018, and Ramaphosa, who replaced him.
“We are willing to negotiate with the ANC, but not the ANC of Cyril Ramaphosa,” MKP spokesperson Nhlamulo Ndlela said.
MKP and the populist EFF have called for parts of the economy to be nationalized. The Democratic Alliance is viewed as a business-friendly party and analysts say an ANC-DA coalition would be more welcomed by foreign investors, although there are questions over whether it is politically viable considering the DA has been the most critical opposition party for years.
An ANC-DA coalition “would be a marriage of two drunk people in Las Vegas. It will never work,” Gayton McKenzie, the leader of the smaller Patriotic Alliance party, told South African media.
Most developed, most unequal
Despite the uncertainty, South African opposition parties were hailing the new political picture as a much-needed change for the country of 62 million, which is Africa’s most developed but also one of the most unequal in the world.
South Africa has widespread poverty and extremely high levels of unemployment and the ANC has struggled to raise the standard of living for millions. The official unemployment rate is 32 per cent, one of the highest in the world, and the poverty disproportionately affects Black people, who make up 80 per cent of the population and have been the core of the ANC’s support for years.
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The ANC retains the loyalty of many voters for its leading role in overthrowing white minority rule. Its progressive social welfare and black economic empowerment policies are credited by supporters with helping millions of black families out of poverty. But over three decades of almost unchallenged rule, its leadership has been implicated in a series of large-scale corruption scandals, while the continent’s most industrialised economy has languished.
The ANC has also been blamed—and now punished by voters—for a failure in basic government services that impacts millions and leaves many without water, electricity, or proper housing. Nearly 28 million South Africans were registered to vote and turnout is expected to be around 60 per cent, according to figures from the IEC.
(with inputs from AP, AFP, and Bloomberg)
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