Being in government is a lot harder than being on the opposition benches, DA leader John Steenhuisen says, ahead of the GNU marking its first year in office at the end of June.
The GNU, a 10-party coalition dominated by the ANC and the DA, has had a tumultuous time in the inaugural year of the seventh administration. There was serious disagreement over legislation such as the Basic Education Laws Amendment Act, signed into law by President Cyril Ramaphosa in September last year, and the Expropriation Act. There has been a simmering battle over employment equity.
The GNU has highlighted enduring contradictions in South Africa, 31 years into the democratic dispensation, and the leadership of both the ANC and the DA have been stretched to the limit. However, the impasse over the budget, which threatened to collapse the GNU and had the DA going to court to scrap the contentious VAT hike, was also almost a blessing.
“The VAT fight did a great deal to reset relations between the GNU partners,” says Steenhuisen. “It produced the realisation that no party has a majority on its own, and that we have to work together, listen to each other and collaborate more.
“I feel it was also a good opportunity to deal with some of the issues that have been outstanding since the formation of the GNU. As the DA we certainly took on board some lessons from the VAT issue, and this has allowed us scope to better handle matters with our coalition partners.”
Steenhuisen says the GNU is complex — “messy and frustrating” — but the DA remains committed to playing its part in turning things around and fixing them.
He warns that the low economic growth trap poses an existential threat to the GNU. The GDP figures for the first quarter of 2025 showed more of the same, a narrow 0.1% growth. And this would have been a contraction had it not been for a knock-out first quarter in the agriculture sector.
The latest economic survey focusing on South Africa by the Organisation for Economic Co-operation & Development (OECD) confirms a familiar story: the economy is stagnant and the pace of reforms is simply too slow.
Steenhuisen says this is being addressed by the GNU cabinet. “We have already, as a result of compromises around the budget process, agreed that immediate priorities are a comprehensive spending review, an assessment of procurement regulation efficiencies and a concerted effort to cut red tape.
“This is essential if we are to get rid of waste, duplication and friction costs and provide a springboard to an economy that is ready to create jobs and grow,” he says. “There needs to be a conscious culture change across the whole of government, to contain costs and focus spending on actions and programmes that will directly stimulate economic growth.”
He says Ramaphosa, the presidency’s Operation Vulindlela and the entire cabinet are reviewing laws and regulations inhibiting economic growth. The OECD survey shows how difficult it is, for instance, for small businesses to obtain the necessary licences. Red tape and regulation are a blight not only on small businesses but also on professionals such as lawyers, accountants and doctors.
The misrepresentation of the Expropriation Act is evidence that the beneficiaries of apartheid won’t sleep
— Fikile Mbalula
While the budget dust has settled, the DA is waging battles important to its own constituency. It is challenging the Expropriation Act and the Employment Equity Amendment Act in court. This has frustrated the ANC, which views the DA’s stance as anti-transformation and, in the case of the Expropriation Act, alarmist.
The ANC regards the two pieces of legislation as important to its constituency.
“The misrepresentation of the Expropriation Act is evidence that the beneficiaries of apartheid won’t sleep,” ANC secretary-general Fikile Mbalula said at the funeral last month of one of his predecessors in the party secretariat, Duma Nokwe.
“Similarly, those who have taken us to court for advancing employment equity are working overtime to reverse the gains of freedom. It is clear to us … that the only way to overcome this strategic setback is to win the elections with an outright majority.”
The DA has approached the court on the Expropriation Act, asking it to determine if the legislation falls foul of the property clause in the constitution. Its challenge to the Employment Equity Amendment Act seeks to set aside the legislation on the basis of the damage it will inflict on economic growth.
While the DA agrees that there is a need for equality and transformation, it differs fundamentally with the ANC on how to achieve it.
Ramaphosa, addressing the Black Business Council last week, said the government would not back down on its commitment to empowerment, equality and transformation. “We cannot separate our drive for inclusive growth from our drive for economic empowerment.”
He recognised that there had been concern about the effect the establishment of the GNU would have on the state’s approach to economic empowerment and transformation. “The parties to the GNU reflect a wide range of political, social and economic perspectives. Even now, these parties continue to articulate differing positions in public.
“These debates are important and should be aired. Yet the agreed priorities of the GNU provide a platform for meaningful transformation. The medium-term development plan has identified three strategic priorities: driving inclusive growth and job creation; reducing poverty and the high cost of living; and building a capable, ethical and developmental state.”
Analysts agree that the debate around transformation is far too narrow — that it is not a choice between empowerment and economic growth. There has to be a discussion on how to get both right at the same time.
Social Research Foundation chair Frans Cronje argues that South Africa has accomplished neither growth nor transformation. “I don’t think you could really say, looking at the past 20 years, that transformation policies, as they have been enforced, have been successful.
“If you look at the top of corporate South Africa, you can’t say these policies have worked. Now, if they had worked, let’s say 80% of corporate CEOs were black … you might then be able to say, look, there was also a price that was paid in terms of fixed investment, but at least we got the transformation side right.”
Cronje has repeatedly sounded the alarm over the low fixed investment-to-GDP rate, warning that taxation of investors on entry and the decade-long passage of the Expropriation Act have dampened investor sentiment towards South Africa.
“These policies have been seen as a blockage on fixed investment. So … how do you get both these things right at the same time? I don’t think you can make much progress by way of transformation without much higher levels of growth and investment.
“I think we’re going to get stuck, and we are stuck, because when you raise these issues on property rights or on the taxing of capital, then the comeback is, well, does that mean we have to surrender the transformation objective?”
Cronje argues that if this is the way the problem is framed, the debate will go nowhere. “I don’t think you’re choosing transformation or growth. At the moment, we’re having neither to any great degree. I think it’s possible to tweak the policy so that we actually have both. I don’t think it’s a choice.”
Mamokete Lijane, global strategist at Standard Bank CIB, says it is unwise to try to find simple answers to complex problems. She says the very structure of the South African economy is growth-inhibiting.
“We inherited an extremely unequal society and an economy that’s extremely extractive — which means if you get rents, you don’t put them back in the economy, you siphon them off to wherever. The bulk of people in South Africa don’t have access to economic activity that would then galvanise growth.
“There’s a very general high-level question. Is transformation a necessary precondition for growth? Is broad-based BEE transformation? What’s a transformative economy in South Africa? And when you are dealing with structural issues like spatial inequalities, it’s not going to happen even in one generation.”
She suggests that transformation is not limited to certain pieces of legislation but should be based on a host of interventions such as education, housing and access to nutrition. This echoes Ramaphosa at the Black Business Council event, where he said equality was a lifetime endeavour, seeking to improve lives from birth into adulthood.
Aside from the polarised debates between the ANC and the DA on transformation, there are other risks to the GNU which could come into play for the two anchor parties. Both are heading to internal leadership elections — the DA next year and the ANC in 2027. In the midst of this, they are set to square up in what is expected to be another brutal local government election towards the end of next year, or early in 2027.
While the past year has not been easy, South Africa’s road into coalition territory nationally is likely to get even more complex.
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