MTBPS: Is the GNU hitting its stride?

The ANC has suddenly emerged from the strategic and tactical coma induced by the shock of its electoral setback in May 2024. The consequence is that South Africa has finally caught a glimpse of the immense potential of the GNU.

For the first time since its formation, there appears to be a coherence and a sense of purpose in the GNU that were not there even a month ago.

The past year has been tumultuous for the 10-party coalition, but the successful delivery last week by finance minister Enoch Godongwana of the medium-term budget policy statement (MTBPS), and the wide welcome it received (DA caucus members were even seen standing and applauding), seemed to be the first signs that the coalition is stabilising.

The shift was made possible by two essential additions to the GNU ingredient list — compromise and leadership.

The political progress began bearing fruit on October 29 when Deputy President Paul Mashatile announced the terms of reference for the “clearing house” — the dispute resolution mechanism for the GNU. The terms of reference are far from perfect, and the delay in finalising them has been a sore point for the other parties in the coalition — but better late than never.

On November 4, the agreement on the terms of reference was followed by a long-awaited leaders’ forum convened by President Cyril Ramaphosa at the Cradle of Humankind near Joburg.

Amazing as it seems, this was the first opportunity since the GNU’s formation for all 10 party leaders to interact outside the stifling structures of the cabinet and government

Amazing as it seems, this was the first opportunity since the GNU’s formation for all 10 party leaders to interact outside the stifling structures of the cabinet and government. It also marked a step forward for Ramaphosa, who the same party leaders had in the past accused of being stand-offish.

This was one of the processes and events that enabled the MTBPS to pass without a hitch. Godongwana tabled a presentation on the state of the economy and the country’s fiscal outlook, a precursor to the sustained briefings GNU partners will receive as part of the cabinet process.

It was a stark shift from March, when a budget row erupted over a surprise VAT increase. Back then, coalition party leaders and even ANC ministers were briefed only on the eve of the budget’s tabling.

Refreshingly, the MTBPS responded directly to the priorities set during the leaders’ forum — specifically, the focus on municipalities and allowing for interventions where they fail to fulfil their mandates. Insiders across parties said Godongwana has shown significant leadership in the way he and the National Treasury team managed the budget process, consulting at “every step of the way”.

While the GNU’s broad agreement over the budget marked a shift from the March-May process, the reforms already initiated across the economy during Ramaphosa’s first term and into his second are beginning to yield results.

Predating the GNU, Godongwana and his team were leading from the front with reforms holding the line on state finances. This is now evidenced in both South Africa’s exit from the Financial Action Task Force greylist, thanks to the leadership of former Treasury deputy director-general Ismail Momoniat, and the country’s first investment ratings upgrade in almost two decades by S&P Global.

Godongwana announced an adjustment to the inflation target, the first in 25 years. This was despite an earlier clash with Reserve Bank governor Lesetja Kganyago, who began a bold public campaign this year that the target be reduced to 3%. Clearly something has been stirring in the senior ANC leadership.

Godongwana (and the cabinet) were eventually persuaded and he announced the cut, with a one-percentage-point tolerance band on either side. It was a significant win for Kganyago, who in the MTBPS media briefing called it a victory for the country — another sign of leadership. “There is only one winner here, it is South Africa,” he said.

And the DA finally ended the frustration of coalition partners, which Ramaphosa himself publicly expressed, over the delay in announcing a replacement for the ousted deputy trade, industry & competition minister Andrew Whitfield.

Steenhuisen had dithered for months, due mainly to internal party wrangling, but he eventually named Alexandra Abrahams to the post, and axed Dion George as minister of forestry, fisheries & the environment, replacing him with Willie Aucamp. Steenhuisen had wanted George, who is the DA’s finance chair, to replace Whitfield, but George rejected this “demotion”.

There are ructions within the DA between Steenhuisen and his opponents, as seen in the explosion of leaks and counterleaks about George. Some sources criticise his cabinet performance and others suggest he was fired due to pressure from pro-hunting groups; even Steenhuisen’s personal financial behaviour has been cited.

The ANC broadly welcomed the market-friendly budget at its national executive committee (NEC) meeting over the weekend, but warned that more needed to be done to create jobs. This came against the backdrop of the announcement by Stats SA last week that unemployment declined 1.3 percentage points in the last quarter, the first drop this year.

The point that keeps coming up is you need to then think very seriously about how you use the momentum we are sitting on to press hard on this thing of employment creation. We need a jobs plan

—  Zuko Godlimpi

Zuko Godlimpi, the ANC’s head of economic transformation, told a media briefing on Sunday that “the point that keeps coming up is you need to then think very seriously about how you use the momentum we are sitting on to press hard on this thing of employment creation. We need a jobs plan.” He said the ANC’s upcoming midterm policy meeting, the national general council, would have to help come up with this plan.

“At a macro level, positive momentum is playing out, but the test is whether we can translate that momentum into a dividend that all South Africans can see,” Godlimpi said.

Deputy finance minister and NEC member David Masondo also pointed to the improvement in South Africa’s investment rating and the setting of a 3% inflation target, as well as the Treasury reporting a primary budget surplus for three consecutive years.

“What that means is that our revenue is higher than our expenditure on the non-interest expenditure. For someone who has to invest in buying your bond, they’ve got confidence that you are in a position to service that debt. This does not only affect the government bonds, but it also affects the economy as a whole, because if you are a country that has a high debt level, you’ve got to pay the price for that,” Masondo said.

“So this upgrade is a huge achievement. It’s a very important outcome of the work that we’ve been doing. Even before the GNU, by the way, because this work, this primary budget surplus, making sure that we grow our economy, that we manage our public finances, did not start when the GNU started. It has been going on for a couple of years.”

A significant political development at the NEC meeting over the weekend addressed another potential hurdle the GNU could face, related directly to internal ANC battles.

Ramaphosa was widely reported to have laid into detractors who are spreading the rumour that he will resign after the G20 summit this weekend. The reports have appeared in various Sunday newspapers. Ramaphosa said he was willing to step down if the NEC asked him to — in the clear expectation that it would not — and emphasised the need for lifestyle audits for senior party bosses in light of the allegations before the Madlanga commission.

The FM understands that the narrative of Ramaphosa’s early departure has its roots in ANC structures in the Eastern Cape. Interestingly, insiders say, the narrative is being promoted by Ramaphosa allies who are bitter at not having been included in the GNU cabinet.

“It is wishful thinking from comrades who want him gone, though there is a lot of disillusionment with him among many people in the organisation,” one source says.

Though Ramaphosa is going nowhere for now, this does mark the moment in the ANC’s succession calendar when factions begin realigning in preparation for the election of new leadership, scheduled to take place in 2027.

The NEC co-opted ANC MP and former presidency spokesperson Khusela Diko and parliamentary speaker Thoko Didiza onto the powerful national working committee. Didiza is being mooted by some Ramaphosa backers as a successor for the president.

Internal ANC dynamics are likely to become more central to the GNU in the coming years, meaning that the improvements registered so far are small steps in a long journey ahead.

Differences remain between the ANC and the DA, particularly around BEE policies, some of which the former opposition wants scrapped. Then there is the February 2026 budget, when the policies put forward by Godongwana last week will be practically implemented — this will mark the true test of success, says DA finance spokesperson Mark Burke.

“To take a step back: it is never a desired outcome to have a falling out with our partner [as happened in March]. That then brings us to how did we feel last week, and how are we feeling at the moment?” he says.

“I think we have to understand the nature of the two cycles. There’s the one of the actual budget, whose nuts and bolts we’ll see in February. What we have now is the policy statement, which is a direction for policy that influences budget, as opposed to rands and cents in tables. It’s a technical distinction, but it is important.”

But there is cause for optimism, says Burke. “It would be a bit incongruous if we’re making these policy direction announcements now, and then diverge from those four months from now. But it’s not unheard of in South Africa and it’s not unheard of with the ANC. So we’ll have to see. But in terms of the policy direction given in the speech, it was commendable. It’s hitting the right notes.”

It is hard to discern exactly what prompted this leap forward for the ANC, and perhaps for the GNU. Yes, there has been good news about the greylist and the budget surplus. But the prospect of another humiliating election — the municipal polls are now just a year away — has clearly concentrated the ANC’s mind. So, doubtless, has the idea of Helen Zille becoming mayor of Joburg.

The reception accorded to the MTBPS should generate fresh administrative energy in the government, and a momentum that seemed unreachable just a few weeks ago. It may be that Ramaphosa at last understands the power he has, and intends to use it.

As US president Lyndon Johnson demanded in the 1960s, when warned by conservative Democrats not to move too fast on extending civil rights to black Americans: “What the hell is the presidency for?”