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South African election preview
South Africa's ruling African National Congress (ANC) stated on 29 April that party members included on a list released by its Integrity Commission that it believes should be removed from the parliamentary list ahead of the 8 May general election would be left to decide themselves if they should step aside.
You can watch my interview on CNBC Africa and read additional details below
The ruling ANC is very likely to achieve more than 55% of the vote and retain its outright parliamentary majority in the 8 May election, resulting in a renewed mandate for current president Cyril Ramaphosa. The opposition Democratic Alliance (DA) is not expected to make a significant improvement on the 22% of the vote that it achieved in 2014, while the Economic Freedom Fighters (EFF) is very likely to as much as double its representation to 12%. A showing of less than 55% for the ANC, which is unlikely, increases the likelihood of Ramaphosa pursuing a radical policy path that incorporates certain priorities of radicals in the ANC, including expropriation of land without compensation (EWC), in an effort to thwart efforts to unseat him as party leader.
An outcome in excess of 55% for the ANC is very likely to result in a policy regime aimed at creating a more investor-friendly environment through the unbundling and partial privatization of electricity utility Eskom, thus helping to stave off future blackouts. This is also likely to lead to a trimming of the executive branch of government, with fewer departments and a smaller cabinet, as the government attempts to curb spending and rein in debt. In such a scenario, more radical policy proposals such as EWC are likely to be delayed as various court challenges run their course and the government accelerates the distribution of state-owned land.
If those individuals that the Integrity Commission has stated should be removed from the parliamentary list do not step aside and succeed in gaining seats in the next legislature, then they are likely to try to disrupt Ramaphosa's policy agenda by colluding with the EFF on key legislation such as EWC. This will increase the likelihood that important policy interventions that Ramaphosa plans to pursue will be delayed as they take longer to pass through parliament, and Ramaphosa is likely to have to fight off parliamentary motions of no confidence up to twice a year during his five-year term.
Sporadic protests aimed at applying pressure on the opposition DA-controlled municipal governments in metropolitan areas are likely to escalate in the days before the election and subside significantly once the election is over. Protests began in the first week of April in major townships around South Africa, including Khayelisha in Western Cape, Soshanguvhe in Pretoria, and Alexandra, which is four kilometers from downtown Sandton, South Africa's financial and business center. The Alexandra protests are likely to disrupt traffic around the greater Sandton area and include blockading of major roads leading into and out of the area. There is a low likelihood of very minor protests following the announcement of the election results between two and six days after the voting.
Indicators of changing risk environment
- If none of the ANC candidates implicated in alleged corruption opts out of the parliamentary list, this will raise the likelihood of the ANC failing to achieve 55% of the vote, elevating the risk of populist policies after the elections.
- If ANC stalwarts including Frank Chikane, Mavuso Msimang, and Cheryl Carolus announce that they will not vote for the ANC in protest against the inclusion in parliament of those implicated in alleged corruption, this will lower the ANC's share of the vote, elevating the risk of populist polices being implemented.
- If more revelations of alleged corruption by EFF leaders emerge, this will lessen the party's share of the vote and dampen its drive for hasty implementation of EWC.
- If the ANC achieves 60% or more of the vote, Ramaphosa will trim the workforce of Eskom in order to bring down its debt. He will likely facilitate the incorporation of more independent power producers into the electricity grid, thus stabilizing power supply. This will assist in averting a sovereign rating downgrade by credit rating agency Moody's Investors Service.
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