For 30 years South African business has been scaring itself that the ANC will change tack on major policies and veer seriously Left. Every year, on the eve of set pieces such as the ANC’s January 8 statement, the state of the nation address, the national budget or even the medium-term budget policy statement, knots have formed in stomachs and analysts have peered into the ANC’s soul to seek omens of leftward drift (or, sometimes, just signs of life).
Yet nothing revolutionary happened in policy terms. In the first 15 years of democracy, the Mandela and Mbeki administrations stared down trade unions, slashed the bloated public service, fixed government finances, ramped up social spending, fixed the fiscus and rolled out infrastructure. The party’s “resolutions” at policy and elective conferences (to nationalise or expropriate without compensation) remained slogans for election rallies and to make its activists feel that they were part of a “revolutionary” party. No huge Left turn there.
The Zuma administration came along in 2009 and its battering ram, Julius Malema, threatened mine nationalisation. He was swatted aside and ousted. Jacob Zuma and some of his acolytes have had a bee in their bonnet about the Reserve Bank and tried to pass resolutions to “nationalise” it. It was empty talk.
Even when the ANC had a two-thirds majority from 2004 to 2009, giving it the ability to change the constitution on its own, it did not touch property rights and other key aspects of our founding document
Even when the ANC had a two-thirds majority from 2004 to 2009, giving it the ability to change the constitution on its own, it did not touch property rights and other key aspects of our founding document.
So what will the economic policy landscape look like after this year’s national and provincial election? Will there be major ructions?
There was an intriguing paragraph in credit ratings agency Fitch’s assessment of the South African fiscal, economic and political landscape last Friday. After a sober and fair analysis of our position (load-shedding will ease, it said, but economic growth will remain poor), the agency said: “The ANC’s dominance over the political landscape has been challenged since the party’s poor performance in the November 2021 municipal elections. We believe the party could lose its majority in the May 2024 general election, but this would be unlikely to result in major changes in economic policy.”
That is worth assessing a bit more deeply. If the ANC does indeed garner less than 50% (say 47%), it will need at least one coalition partner to form a government. A numerically struggling party such as the IFP would make an ideal partner for an ANC that wants to continue its existing policies. The two are not far apart on economic policy and the Ramaphosa administration would easily persuade the IFP to embrace the reforms that are under way.
The sticky part is if the ANC’s performance is even worse, say 40%, which would require it to invite more than one party into a coalition. Certainly, demands would be made that could go beyond just seats in the cabinet. Even if such invited guests are of a centrist economic bent (Rise Mzansi, ActionSA or GOOD), shifts in policy would be likely.
The ANC is in a bind now. Love him or hate him, the entrance of Zuma into the race with his Umkhonto we Sizwe (MK) Party will erode ANC support in KwaZulu-Natal. Zuma will flop everywhere else in the country, but as the most popular politician in KZN (according to the Social Research Foundation poll conducted in October last year), he will hurt an ANC that is divided and limping badly in that province. In Gauteng, the DA and the EFF will exile the ANC to the opposition benches, probably forever.
The ANC is not the juggernaut it used to be and will need coalition partners to stay in power nationally and in some provinces. Which means that, if ever there was a moment when policy was likely to change, it would be after this election. The scenario that would entail the biggest shakeup remains the one in which the ANC fails to corral the rats and mice into a coalition, leaving the EFF or the DA as the main players to schmooze.
In policy terms, the ANC and either of those two are yin and yang. A coalition with one of them would mark a significant change in economic policy. This is not a scenario to discount.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.