Stockholm (Ekonamik) – South Africans take to the polls in a parliamentary election Wednesday (May 8th) that is likely to revolve more around the distribution of power in the governing party than better electoral prospects for the main opposition parties. The election doubles as a presidential election, although voters do not vote directly for president, who is chosen by a parliament whose seats are allocated by proportional representation. However unlikely, an upset for the ruling African National Congress Party (ANC), could lead to a changing of the presidential guard, ether from within or outside its own ranks.
With 48 parties contesting the election, only 13 of these currently sit in the national parliament, and only the ANC and the official opposition, the Democratic Alliance (DA) control regional provinces (voters cast ballots for the national legislature and provincial legislatures). The closest third party is the left-wing Economic Freedom Fighters (EFF), with around 6% of the vote. Polls predict the ANC will once again claim the majority of the 400 national assembly seats, but could still lose ground to the two main opposition parties. The ANC has won every election since 1994, but its share of the vote has fallen in recent years. In the last election 5 years ago, the ANC garnered 62% of the vote, down from the previous one ten years prior.
The issue now is whether the ANC’s chances of carrying out promised reforms will be imperilled. Despite President Cyril Ramaphosa’s promises to crack down on corruption and revitalise the economy, many voters have become disillusioned with 25 years of ANC rule. The corruption and mismanagement under former ANC and South Africa president Jacob Zuma has led to diminishing electoral returns and an effective split within the party between pro-Ramaphosa and pro-Zuma factions, the latter of which continue to back Mr Zuma’s brand of “pro-patronage” politics and use of public resources for private ends.
(Source: OECD)
Mr Ramaphosa, who replaced Mr Zuma after a narrow vote in 2017 and is seen as the most market-friendly candidate, is understood to be making substantial efforts to clean up the party, but the question remains whether voters want to entrust the party itself with continued power after the Zuma administration ran the economy into the ground while ramping up public spending. South Africa remains one of the world’s most unequal countries, has high unemployment, and its global competitiveness is declining – something most observers attribute to Mr Zuma’s nine-year rule – causing investors to flee, economic growth to stall, public debt to soar and unemployment to rise from 23% to 27% over the past six years. The debt-to-GDP ratio rose from 26% a decade ago to almost 56% for 2018-19. By contrast, Foreign Direct Investment skyrocketed by 446% in 2018 during Mr Ramaphosa’s first year in power.
Although the economy has been improving since a short-lived recession last year, business confidence is still low and investors will be looking to a victory for Mr Ramaphosa’s ANC for his market-friendly reforms to be sustained and for fragile economic growth to remain on course. The World Bank and the IMF have already cut growth forecasts for 2019 (from 1.3% to 1.1% and 1.4% to 1.2% respectively), though better forecasts of around 1.7%-1.9% are expected for 2020. Should policy uncertainty following the election prevail, however, it could hinder economic recovery. And if the ANC does badly, it could undermine Mr Ramaphosa and embolden the Zuma and other factions that would like to see him fall. If the ANC falls short of a governing majority, it could force it into an alliance with a smaller party, which would likely stall reforms and create a more ineffective and corrupt state.
Image: Arrival of Cyril Ramaphosa, President of South Africa (Wikimedia Commons)
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