South Africa’s local government election on 3 August 2016 was the most significant political event since the country’s transition to democracy in 1994. In summary, a number of South Africa’s key cities—or “metros”—including Johannesburg, the country’s economic hub, are in the hands of minority- and opposition-led coalition governments.
The liberal Democratic Alliance (DA) and the Marxist-Leninist influenced Economic Freedom Fighters (EFF) have agreed to form an issues-based working relationship at a municipal level. This would have been unthinkable four years ago and it sets a potentially crucial precedent for less racialized politics.
The implications of the election results transcend the immediate practical changes to how these cities will be run, with a new emphasis for citizens and businesses on local—as opposed to national—government, as well as a significant weakening in the political dominance of the African National Congress (ANC). It is now conceivable that the political processes which led to this result could erode the ANC’s national dominance in 2019, although this remains more likely in 2024 if current trends continue.
Assessing the risks that now lie ahead, it is possible that the ANC may seek to undermine the effectiveness of minority- and opposition-led coalition governments. However if these governments can deliver, particularly in the townships, and grow their support bases, the ANC will be on the back foot in the 2019 national elections unless it makes significant changes.
In the medium term, the country’s primary political and policy risk stems from the schism within the ANC, and the way in which President Jacob Zuma addresses the challenges that confront him. There is effectively a rift within the party between his internal support base (the predominantly rural Free State, North West, Mpumalanga, and Kwa Zulu Natal) and the urban leadership, mainly in Gauteng province. These tensions are coming to a head and the grouping that wins will have a lasting impact on the policy environment and the state’s commitment to fiscal prudence.
It is far from inconceivable that President Zuma retreats to his core support base—which will now be even more dependent on his political power—and pursues personally advantageous policies at the expense of sound governance. In the short term, land reform and restitution, transformation in the mining sector, access to the ocean economy (including off-shore gas reserves), and the controversial nuclear power deal will be in the spotlight. Any sharp moves in these areas or another disruption in National Treasury will heighten the risk of a ratings downgrade.
The municipal election result has created the possibility for more favorable scenarios for the country if opposition parties can hold on to and enhance the gains made during these elections. The recent developments highlight the importance of closely monitoring political developments at a national and local level in the weeks and months to come.
To learn more, read a more detailed explanation of the election results and their implications.
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