Future historians may see a pivot point in South Africa’s post-Apartheid history, with potentially big implications not just domestically, but also internationally too.
The reason for the tipping point now is that the May 29 election indicates that the era of Africa National Congress (ANC) political dominance may now be over. In the six national ballots from 1994 until 2024, the ANC won significantly more than 50 percent of the vote, but this changed in 2024, likely heralding a new era of co-governance, with multiple new uncertainties.
There is even a growing possibility that, as soon as 2029, South Africa could deliver the first non-ANC government in the nation’s post-Apartheid history.
To be sure, the ANC will remain the largest party for now, well ahead of an increasing number of opposition movements (more than 50 parties registered to contest the 2024 election, a record number, and independent candidates have been allowed to stand for the first time). There is also a possibility that the ANC could run a minority government, but that would constrain the party’s ability to adopt policies and legislation.
So the ANC will probably now have to strike agreements or coalitions with other parties to remain in government under President Cyril Ramaphosa. Or potentially a successor such as his deputy Paul Mashatile if Ramphosa steps down, or there is a leadership challenge.
Once the election results are confirmed, the ANC will have 14 days to form a government before a new parliament must convene to elect the president. The speed at which a coalition is formed, or not, may well be a leading indicator of how much political gridlock there may be on the horizon in coming years.
While most focus is on the domestic implications of the significant change that the 2024 election has delivered, the international ramifications could also be key. In the last decade, or two, South Africa’s economy (which is Africa’s largest with a GDP of around $370 billion U.S. dollars) has badly underperformed. Today, its GDP is only around one fiftieth of China’s, despite both nations being members of the BRICS group of emerging markets alongside founder members (India, Russia and Brazil), and new ones (United Arab Emirates, Saudi Arabia, Egypt and Ethiopia).
What this highlights is the significantly diverging economic trajectories of these key emerging markets in recent years. Amongst the original BRICS, this has seen generally robust economic performance in China and India over the past two decades contrasting with disappointing results in not just South Africa, but also Brazil and Russia.
So a key question, internationally not just domestically, is whether South Africa can turn this economic picture around. According to the World Bank, the South African economy has retrogressed over the past decade and a half with GDP per capita falling from a high in 2011. Today, it is estimated that around one third of the labour force is unemployed, the highest rate of any country monitored by the World Bank.
One consequence of this economic malaise is that today, a significant slice of South African listed firms are currently valued at a discount vis-a-vis other key emerging markets. This creates a potential opportunity for investors, albeit one with political risk.
Perhaps the key variable that, in the next few years at least, will therefore impact the economy is the nature of the co-governance that the ANC now opts for. Prior to the election, there had been hopes in the business community that the ANC would win close to 50 percent of the vote, and be able to co-govern with one or more of the smaller parties, including the Inkatha Freedom Party.
However, the ANC has underperformed these expectations, raising the possibility that it may need to do a deal with a larger party. One option here is the business-friendly Democratic Alliance which finished second in the ballot.
However, investors are concerned that a window of opportunity might now open up for the ANC to govern with the leftist Economic Freedom Fighters led by the radical Julius Malema and/or former president Jacob Zuma’s uMkhonto weSizwe Party. The latter two groups have potential plans to expropriate land without compensation, and nationalise the central bank. Many investors are therefore concerned that ANC collaboration with one or both of these could see a reversal of some early signals that Ramaphosa’s economic reforms may be slowly, but surely, working.
Politically, there is also uncertainty over the implications of the growing fragmentation of the nation’s polity. The nation increasingly seems split along identity lines, including the ANC — once depicted as unifying a “rainbow nation” — but now increasingly drawing its support from the 80 percent black majority population. For the time being, no significantly sized political group seems able to reflect the country’s multiracial reality with a significant number of the population being white, of Indian heritage or with multiracial ethnicity.
Taken together, the South African election has left significant political and economic uncertainty, and there are multiple potential trajectories for the nation in the second half of the 2020s. The key variable now is which, if any, political partner(s) the ANC will choose to help it co-govern Africa’s largest economy.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.
Era-defining emerging market election in South Africa
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05.06.2024
Future historians may see a pivot point in South Africa’s post-Apartheid history, with potentially big implications not just domestically, but also internationally too.
The reason for the tipping point now is that the May 29 election indicates that the era of Africa National Congress (ANC) political dominance may now be over. In the six national ballots from 1994 until 2024, the ANC won significantly more than 50 percent of the vote, but this changed in 2024, likely heralding a new era of co-governance, with multiple new uncertainties.
There is even a growing possibility that, as soon as 2029, South Africa could deliver the first non-ANC government in the nation’s post-Apartheid history.
To be sure, the ANC will remain the largest party for now, well ahead of an increasing number of opposition movements (more than 50 parties registered to contest the 2024 election, a record number, and independent candidates have been allowed to stand for the first time). There is also a possibility that the ANC could run a minority government, but that would constrain the party’s ability to adopt policies and legislation.
So the ANC will probably now have to strike agreements or coalitions with other parties to remain in government under President Cyril Ramaphosa. Or potentially a successor such as his deputy Paul Mashatile if Ramphosa steps........
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