THE ANC might not get a majority after the election, but the verdict is still out on how far below 51% its support might drop.
With political parties in full-on campaigning mode ahead of South Africans heading to the polls on Wednesday, 29 May, recent polls by the Brenthurst Foundation, Ipsos and the Social Research Foundation reflect ANC support below the 40% mark.
Oxford Economics Africa has published a research briefing – the first of four – outlining possible outcomes and what they would mean for the country’s fragile economy.
In its first scenario, called ‘The ANC and Friends’, the ruling party’s support falls to between 46% and 49% nationally.
“The once-unassailable liberation party is forced to work with small, constituency-based parties to form a national government,” writes the research team.
“The small parties it pulls in at the national level are the Inkatha Freedom Party (IFP), Patriotic Alliance (PA), African Independent Congress (AIC), Good, and Al-Jama’ah.”
The economy will stumble along
In a scenario where the ANC forms a coalition with minor political parties, it would still have the upper hand, and South Africa’s political-economic risk profile would remain relatively unchanged from the current baseline.
Its national-level coalition agreement obliges the ANC to give a handful of ministerial positions to the smaller parties but requires no drastic departure from the ANC’s policy direction as adopted at its last national conference held in Johannesburg in December 2022. There is slow progress towards fixing problematic state-owned enterprises and greening the energy mix, but power cuts remain a problem.
An election result in this scenario will not shock the rand, but lofty international oil prices and El Niño will keep inflation high (forecast at 5.2% in 2024), and it will decline only slowly in the following years.
The South African Reserve Bank will hold rates until the third quarter of 2024. Supply-side constraints will limit real GDP growth to 0.7% in 2024 and 1.4% in 2025.
“South Africa’s economic growth outlook post the election will remain dismal. For 2024, we forecast growth of 0.7% due to persisting logistical constraints, loadshedding, and weak consumer spending which is constrained by high unemployment and elevated interest rates,” the report notes.
“Although we expect growth to accelerate somewhat in the medium term as loadshedding eases, structural constraints are expected to keep growth below 2% per annum.”
South Africa is one of the most unequal societies in the world, suffering from high unemployment, inequality, and crime. Oxford Economics regards the lack of inclusive growth as the most significant risk factor in the country.
Election projections in Scenario One
Although voters disillusioned with the ANC will cause the party to lose its three-decade majority rule, the ANC is not the only loser in this scenario.
The Democratic Alliance (DA) also loses ground, partly because of its “unpopular, full-throated support” of Israel’s actions in Gaza; its share of the votes falls to 20%.
The Economic Freedom Fighters (EFF), on the other hand, ups its share of the vote to 15% thanks to a difficult economic environment, which is fertile ground for its radical message.
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“The uMkhonto we Sizwe (MK) party gets a very respectable 4.5% of the vote – over 800 000 votes – and ActionSA, a liberal party [formed] around ex-Johannesburg mayor Herman Mashaba, does almost as well.”
The ANC similarly loses its majorities at the provincial level in Gauteng and KwaZulu-Natal (KZN) and stays out of power in the Western Cape, where the DA retains its majority.
In KZN, the ANC arrives at an agreement with the IFP, like at the national level, that results in a stable coalition.
Ex-president Jacob Zuma’s MK party is reduced to a small caucus in the KZN provincial assembly and soon disappears from the national conversation.
In Gauteng, the ANC cannot obtain a majority without the assent of the EFF, making for an unstable government in the country’s most populous province.
Projections in Scenario One
