The African National Congress (ANC) got its biggest number of votes in 1994: 12.2 million, or 62.6% of valid votes in that year. The total number of votes that year, 19.5 million, has never again been equalled in a South African election.
Democracy after 30 years
The ANC’s biggest share of the vote was obtained in 2004, in the election after President Thabo Mbeki’s first term, when it got 69.7% of the vote on a score of 10.9 million.
In 2005, Mr Mbeki fired Mr Zuma as his deputy president after the latter was implicated in corruption, but he lost the battle for the ANC in 2007 when a national conference chose Mr Zuma as party president.
In September 2008, after twists and turns in Mr Zuma’s corruption cases, the party asked Mr Mbeki to step down as national president.
Kgalema Motlanthe took over the presidency, and it was clear that Mr Zuma would become head of state after the 2009 election.
Several aspects of South African politics that are highly relevant to this year’s vote became apparent in the 2009 election, of which the most important is Mr Zuma’s appeal in KZN.
Before the election, a faction of the ANC made up of members close to Mr Mbeki broke away as the Congress of the People (Cope), and the new party got 1.3 million votes.
That ought to have damaged the ANC, but in fact, the ruling party boosted its votes by over three-quarters of a million.
It did that by somehow boosting turnout – total valid votes increased by over two million – and by eating into the IFP’s vote share.
The historical Zulu party lost 200,000 votes from 2004 to 2009, and then 360,000 more between 2009 and 2014, when Mr Zuma was again the face of the ANC.
How relevant will the former president’s appeal in his Zulu heartland be to this year’s election?
Support for the main opposition party, the liberal Democratic Alliance (DA), peaked at just over 4 million in 2014. It declined to 3.6 million in 2019, which some in the party blamed on its leader at the time – Mmusi Maimane, who is black and who quit the party later that year.
In this year’s election, Mr Maimane is leading Build One South Africa, intended as an umbrella organisation for independents running for legislative seats.
The DA is part of the multiparty charter (MPC) with ActionSA, the IFP, the Freedom Front Plus (FF+), the African Christian Democratic Party (ACDP), and 11 marginal parties.
The MPC charter requires its members to decline to make deals with the, but the DA has hinted that it might … and an ANC-DA tie-up is another of our election scenarios.
After Cope on the liberal wing, the next important split in the ANC came in 2013, when Julius Malema, who had been ANC Youth Wing Leader and then got expelled from the party, founded the Economic Freedom Fighters (EFF).
The EFF challenges the ANC from the left, accusing it of insufficient concern for the plight of poor black (and more especially black African) people in South Africa.
The Fighters’ radical message has resonated: in 2014, the year after the party was founded, the EFF received 1.1 million votes or 6.4% of the share, and in 2019, it got almost 1.9 million or 10.8%.
Changes to the ballot
There are two main changes to this year’s ballots: independent candidates and the new regional ballot.
Independent candidates are now allowed to run for Parliament and a spot in the provincial legislatures.
This necessitated a change to the ballot structure and voters will now receive three ballots on May 29: national, regional, and provincial.
For the provincial elections, the structure of the provincial ballot remains mostly the same.
The electorate in each province casts a vote for a political party or independent candidate to represent them in the provincial legislatures.
The number of seats or members of the provincial legislatures (MPLs) per province ranges from 30-80, based on each province’s population size.
The ballot structure for the election of the 400 MPs has changed notably to accommodate independent candidates. Each voter now receives two ballots: one regional and one national. On the national ballot, the electorate casts one vote for a political party to represent them in Parliament.
Only political parties contest the national ballot, and 200 seats in the National Assembly are allocated proportionally based on their aggregate national vote share.
On the regional ballot, both political parties and independent candidates contest the remaining 200 seats for Parliament. These 200 MP seats were split between the nine provinces allocated based on the size of each province’s electorate.
The number of MP seats assigned to each province ranges from five in the Northern Cape to 48 in Gauteng.
On the regional ballot, the electorate casts one vote (for either a political party or independent candidate) from their province to represent them in the National Assembly.
The IEC then assigns each province’s regional MP seats proportionally based on their aggregate provincial-level vote share.
Election outcome
The most recent poll of voting intentions was conducted in April by the Social Research Foundation (SRF), a company co-founded in 2021 by former Institute of Race Relations
CEO Frans Cronje can be assumed to tend to favour the liberal (that is, DA) narrative. Assuming turnout at 60%, the poll has support for the ANC at 38%, DA at 25%, and EFF at 11%.
The electoral givens on which we base our election projections are the following. ANC voters are disillusioned, and the ruling party’s share of the vote falls to 46%.
The DA has lost ground, at least partly because of its very unpopular full-throated support of Israel’s actions in Gaza, and gets 20%.
The EFF boosts its share to 15% in a difficult economic environment, where its radical message resonates. MK gets a very respectable 4.5% of the vote – over 800,000 votes – and ActionSA, a liberal party around ex-Johannesburg Mayor Herman Mashaba, does almost as well.
The coalition and its policy
In this scenario outcome, the ANC loses power but is close enough to the 50% threshold to have the upper hand in coalition negotiations.
The IFP chooses to align with the ANC in exchange for influence and appointments in KZN. The Patriotic Alliance
(PA), a party that hunts for votes in the coloured (mixed-race) community, is part of the party, as are Al-Jama’ah, a party that
plays on Muslim identity, and some minor parties with a leftist and Africanist inclination.
The government will not deviate from the ANC’s policy stance.
The domestic economy’s problems are structural, exacerbated by a lack of investment and insufficient maintenance of critical infrastructure over the years.
South’s investment has been dropping since 2013. This is the case for both the public and private sectors, limiting the economy’s capacity to generate sufficient employment growth and expand the supply of goods and services.
Low levels of private sector confidence, state capture and ineffective policies are among the key reasons for the decline.
State-owned entities (SOEs), of which Eskom and Transnet are the largest and most important, have become hugely inefficient over the past 15 years, severely curtailing commercial prospects of business across the economy. National Treasury notes that over a decade a third of the decline in South Africa’s economic growth after 2010 could be explained by the direct effects of reduced productivity from public utilities.
This means that South Africa forewent R2trn in economic activity between 2011 and 2019 as a result of underperforming SOEs, a figure that has since increased substantially.
Macro outcomes
Since the election outcome in this scenario exercise has been our baseline expectation for some time, the macro outcomes under it are those in our most recent Country Economic Forecast.
The economic growth outlook for South Africa remains dismal. For 2024, we forecast growth of 0.7% due to logistical constraints, load shedding, and weak consumer spending which is being constrained by high unemployment and elevated interest rates.
Although we expect growth to accelerate somewhat in the medium term as load-shedding eases, structural constraints are
expected to keep growth well below 2% p.a. We forecast inflation to slow to an average of 5.2% in 2024 thanks in part to lower global food and fuel prices and because of soft domestic demand.
That said, the risks to the inflation outlook are skewed to the upside owing to a weak rand, together with supply-side issues stemming from the logistics and electricity crisis, as well as the possible escalation of tensions in the Middle East.
Upside risks to the domestic inflation outlook, capital flow volatility and a weak currency, among other factors, imply that the South African Reserve Bank (Sarb) has not had the luxury to implement early rate cuts.
We anticipate policy easing to commence in 2024 Q3 and that the repo rate will reach 7.75% by the end of the year.
South African 10-year government bond yields have been hovering between 11% and 12% since the start of the year due to years of large fiscal deficits, surging public debt, numerous credit rating downgrades and a general worldwide increase in interest rates since 2021. The bond yield is forecast to remain close to 11% over the forecast period.
On the one hand, lower policy rates and lower US bond yields are set to put downward pressure on yields, while on the other hand, political uncertainty, a wide budget deficit and rising debt levels are expected to place upward pressure on yields.
South Africa’s fiscal ratios improved thanks to the R150bn in Gold and Foreign Exchange Contingency Reserve Account (GFECRA) profits and after the Treasury raised its revenue forecasts.
Even so, the fiscal outlook is not much brighter, with economic growth too weak and recurrent spending too high.
The government’s high borrowing requirement, owing to Eskom debt relief and increased debt redemptions, suggests precious little is left for embattled Transnet.
South Africa will have to borrow a lot over the coming years and the country faces higher debt redemptions over the medium term, at a time when interest rates are high and revenue growth weak. We forecast government debt will continue to rise and peak closer to 88% of GDP over the long term.
Due to South Africa’s weakened macroeconomic fundamentals and lousy fiscal position, negative credit rating actions are considered more likely than positive revisions over the near term.
Political-economic risk
Should the ANC go into a coalition with minor political parties, South Africa’s political-economic risk profile will remain relatively unchanged from the current baseline or pre-election baseline.
South Africa is one of the most unequal societies in the world, suffering from high unemployment, inequality, and crime.
Welfare grant recipients (18.4 million) far outstrip income taxpayers (7 million), representing a risk to the fiscus and social cohesion.
The violent unrest in KwaZulu-Natal and Gauteng in 2021 – sparked by political developments and desperate socio-economic conditions – was a stark reminder that a rapid deterioration in the security environment remains an ever-present risk.
The lack of inclusive growth is the most significant risk factor, with weak economic growth, high inequality, and unemployment straining the economic policy environment.
Similarly, high inequality and social polarisation elevate the risk of protests and unrest, with political violence risks above the African median.
Corruption and the quality of rule and law risks are muted compared to the rest of Africa but remain higher than its peers in Botswana, Mauritius, and Morocco.
Still, South Africa’s business and operational environment compares favourably to the rest of the continent and should remain relatively similar should the ANC stay in power in a coalition government.
Muted inflation, soft consumer demand, a diversified economy, and orthodox monetary policies keep market risks relatively low compared to the rest of Africa.
Still, persistent budget deficits, high grant spending, and a relatively small tax base remain concerning in terms of financial capacity risk.
The most significant change to the current baseline is the political regime risk, which has risen. The ANC could find it more difficult to pass legislation without an outright majority.
It would need to compromise more often with its coalition partners and risks being removed from government should its coalition partners defect.
Full report here
