On May 8, South Africa held its most competitive and consequential general election since the first post-Apartheid multi-racial elections in 1994. It will be used as a marker to determine how well the new President, Cyril Ramaphosa, has been received by the public after former President Jacob Zuma was ousted by his own party. It will also determine if Moody’s, a global credit rating agency, will reduce its outlook of the country’s economy to negative, or in a devastating move, drop its credit rating to junk status.
South African Elections Commission reports that with 100 percent of the votes counted, the African Nation Congress (ANC) has retained its national majority with 57.5 percent of the vote. The opposition Democratic Alliance ended with 20.77 percent, the Economic Freedom Party with 10.79 percent, and the other 45 parties receiving the remaining 10.94 percent. However, 35 of the parties in this final category do not qualify to be represented in the national parliament.
According to the Washington Post, this is the first general election in which the ANC, Mr. Ramaphosa’s party, won less than the traditional benchmark of 60 percent. PBS reports that the factors include poor voter turnout, which dropped 9 percentage points to 65 percent from 74 percent 5 years ago, and the loss of support of the black middle class.
The reduced turnout is attributed to a poor showing among voters that live within informal settlements who are traditionally deeply loyal to the ANC. These voters have felt ignored by the party as many still lack running water, electricity, and proper shelter. Additionally, the black-middle class was discouraged by reports of widespread corruption in the ANC under the leadership of former President Zuma.
Leading up to the election, sustained high unemployment rates, frequent power outages, and corruption saw the ANC’s favorability drop to as low as 47 percent in 2017. The ANC’s image has improved since Mr. Zuma was ousted, but still underperformed when compared to the general election 5 years ago.
In this election, the party nearly lost its simple majority in the Gauteng region’s provincial parliament by winning only 50.19 percent of the provincial vote. According to The New York Times, Gauteng is the economic and political hub of the country and would have been the second province that the ANC lost control of since 1994. Despite the setbacks, their margin of victory in the national vote will ensure the anti-Ramaphosa faction of the ANC does not have the power to prevent him from gaining another term.
The centrist Democratic Alliance (DA), the ANC’s largest rival, saw a small reduction in its national vote share, but managed to receive 55.45 percent of the vote from the Western Cape province. The DA had hopes of increasing its vote share in Gauteng, but both the ANC and the DA lost ground to the radical Economic Freedom Fighters (EFF) party.
The EFF is South Africa’s communist and ethnonationalist party. Formed in 2013, it has become the country’s largest growing party and increased its national vote share from 6.35 percent in 2014 to 10.79 percent today. It advocates for land reforms that involve seizing white-owned property and redistributing it to the poor black population. This has led to an increase in white nationalism, which can be seen in the increased support (0.9 percent to 2.38 percent) for the Vryheidsfront Plus party (Freedom Front Plus). This party advocates for the establishment of a separate country for only white people to live in.
By maintaining the political status quo for at least the next five years, these results will calm investors keeping a close eye on South African prospects. Trading Economics indicates that the South African currency has stabilized, but stocks are down due to uncertainty surrounding Gauteng’s official provincial result. Business Tech reports that investment firm Moody’s will release a credit rating report soon.
Cyril Ramaphosa will most likely be approved for another term by the new parliament and be sworn in on May 25. To keep the ANC dominant, he will need to continue purging corrupt politicians that remain from the presidency of Jacob Zuma, and implement investor friendly policies as foreign capital is a huge source of GDP growth for South Africa.