Business Maverick

Business reflection

After the Bell: How to avoid the most likely election outcome: an ANC/EFF alliance

After the Bell: How to avoid the most likely election outcome: an ANC/EFF alliance
President Cyril Ramaphosa casts his vote at the Hitekani Primary School in Soweto, 29 May 2024. (Photo: EPA-EFE/STRINGER)

For those who think the ANC deserves an electoral klap for state capture, poor economic growth, higher unemployment, degrading infrastructure, and so on (me), the 2024 election is a vindication. But for those worried about SA’s future (me), the 2024 election is turning out to be close to the worst possible vote split because it seems now that the ANC’s easiest route to power will be through the EFF. 

Of course, the results are not final yet, so things could change. But with the IFP obliterated by the MK party and many of the smaller parties underperforming, the ANC’s most direct route to power does not lie with them. The way the cookie is crumbling, this path would require the ANC to go into alliance with five, maybe six, smaller parties. But with the ANC at around 43% and the EFF hovering around 10%, for the ANC, numerically at least, this is by far the simplest solution.

I’ve made this point before, but senior members of the ANC really don’t like this option, because they know an alliance with the EFF will destroy the ANC. The EFF will strengthen all of the ANC’s worst instincts and undermine its best: the ANC – at least until very recently – remains committed to fiscal probity, talking big on the podium but behind the scenes being cautious.

With the EFF inside the hen house, this caution will most likely be thrown the wind, and the ANC’s already outrageous fiscal undertakings are more likely to be implemented. In a sense, the EFF will be pushing the ANC in the direction it wants to go anyway. 

There is an argument that, long term, this won’t be the worst outcome. The new government would inevitably fail and the implosion of the ANC would open the way for a completely new political realignment. But in the meantime, the suffering would be abhorrent. Think of a kind of Zimbabwe-light – racial politics at its extreme, farm expropriations, more corruption, etc. And that would mean ever higher inflation and interest rates, a worthless Rand, even more decaying infrastructure, all the stuff we know already, but worse.

But before we get too maudlin, there are two other options. The Head of Policy at the Free Market Foundation, Martin van Staden, has written an interesting article in the liberal journal The Daily Friend, arguing that the popular narrative that South Africa only has two options (being an ANC-DA or ANC-EFF government), is dangerously misleading.

If the DA decides to go into a coalition with the ANC, justified by claiming it is necessary to keep the EFF or MK out of government, the party will not survive the marriage, he argues. An ANC-DA alliance is just not possible mainly he says because the DA will not be able to tackle corruption in any real sense while it is the junior partner in Cabinet.

I agree but for slightly broader reasons. The DA and the ANC are too many miles apart ideologically – we are talking about a collectivist mentality vs an individualist mentality. Add to that the cautionary tale from the UK: when the Liberal Democrats aligned with the Tories after the 2010 election to form the Cameron-Clegg coalition, the following election in 2015 saw the Liberal Democrats lose 49 of their 57 seats. When you go into coalition as a minority partner, you tend to lose your definition as an independent party. The same sort of thing happened to the National Party in the Government of National Unity in 1994.

But there is another option. The DA could offer what Van Staden calls a ‘confidence and supply’ arrangement in exchange for the ANC rejecting a coalition with the EFF or MK. In terms of the agreement, the DA would (1) vote for the ANC’s presidential candidate, (2) keep the ANC Cabinet in government during no-confidence votes, and (3) approve the ANC’s annual state budgets. In return, the DA would stay out of government, but get several seats on parliamentary oversight committees.

It’s an intriguing idea. What could go wrong? As it happens, a lot. First, it’s a deal very strongly weighted in favour of the ANC. They get to carry on governing as they want, and all they have to do is hand out some pretty powerless portfolio committee chairmanships. Great deal (not). The bigger problem would arise if the ANC government did something really outrageous that would force the DA to go back on its word and vote in favour of a vote of no confidence.

Still an interesting idea.

The second option would be for the entire Multi-party Coalition to go into formal alliance with the ANC because the result would be a more even split. As it stands now, the MPC grouping would have around 30% of the vote, and the ANC, a bit more than 40%.

In this situation, Van Staden sees a 50/50 cabinet portfolio split but even if this is a conceivable idea in broad terms, I don’t think the ANC will agree to that – even though it is appealing for the country. Fairness would dictate a proportional split. I could be wrong, but the ANC would argue, rightly, that this would be a very unstable government. And anyway, I think the ANC is just too used to power now, so the idea of sharing it on a roughly equal basis would be horrendous for them.

The more you look at the ANC’s options, the more likely a Floyd Shivambu finance minister scenario seems the most likely outcome, God help us. 

Good investing,

Tim Cohen

Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted