Election uncertainty, a double threat to South Africa Inc and you, the people

South Africa’s 29 May 2024 National Election promises a complicated and hard-to-understand three-ballot election process containing hundreds of difficult to navigate small-print names and logos, and little else. Voters will be asked to place one-cross-only on each of a national ballot, a provincial ballot and a regional ballot.

The blah blah overload of empty promises

Apologies for the cynical introduction, dear reader, but watching the usual blah blah overload of empty promises in the run-up to this alleged celebration of democracy, the best way your writer can describe the looming fiasco appears in today’s headline: Election uncertainty, a double threat to South Africa Inc and you, the people. Examples of empty promises abound. In an analysis by Africa Check, published on EWN, the label ‘broken’ attached to many of the winning African National Congress’ (ANC’s) 2019 promises including to increase visible policing in communities and reduce crime, especially against vulnerable groups. 

As political parties jostle for media attention and market and political commentators flock to public platforms to inform us of what the election result will mean to business, households and the world, the citizen is all but forgotten. Post-election, while some hack uses his or her single election seat to secure a mayorship and lock in an eight luxury car, 10 bodyguard VIP motorcade, you will remain at the mercy of smash-and-grabbers on the M1 motorway, or left waiting for the proverbial bus or train that never comes. PS, the City of Johannesburg, everything but a world class African city, is now spending more than R3 million each month to protect a handful of ‘The Elected’. 

You see, dear reader, South Africa’s election process is no longer about democracy or Jane and Joe average; but about a handful of generally toxic, and certainly narcissistic, individuals positioning to extract the biggest possible share of the money and power attaching to the so-called leadership roles in the national, provincial and municipal structures. A prime example of this ‘extraction in action’ is provided by Joburg CAN, an initiative of the Organisation Undoing Tax Abuse (OUTA), which is critical of recent ‘city official’ pay hikes, and more critical of the Johannesburg executive mayor receiving more than the agreed sum. 

The good, bad and ugly of the 2024 National Election

The election analysis slips further into the ‘doom and gloom’ realm when you begin toying with the election outcomes, and their likely impact on financial markets and society. “The 2024 elections will undoubtedly stand out as the country’s most unpredictable election since the dawn of democracy,” commented PSG as they introduced a PSG Think Big webinar aimed at unpacking the likely election result. They, like many others, kicked-off the discussion with hints that the ruling ANC may fall below the crucial 50% level, opening the door for countless post-election coalitions. 

Foreign policy analyst Sanusha Naidu offered one of the best two-word assessments of the country’s political future, using the phrase “gamble election” to introduce the upcoming vote. She said that although predictions indicated a decline in the ANC’s majority, opposition parties and voters could not afford to become complacent. Blah blah, dear reader. The truth is the voters have watched this show many times since the country’s first democratic elections back in 1994. Each iteration plays out similarly: the people vote, and the politicians abandon them until a month or three before the next election circus. 

The PSG Think Big event suggested that voters were increasingly apathetic about their participation in election results; an unsurprising observation given the points already raised in this article. “Parties cannot assume that their previous voters will come out in support of them this year,” Naidu sad. “In fact, the trend has been that some previous party supporters have withheld their votes at the polls [deciding] not to participate in the elections because they did not deem the opposition parties to be viable alternatives,” she said. Who can blame them? 

As the election day looms, so do the IEC estimates of up to 200 political parties contesting the national ballot. In this context, the ANC may lose its majority, but will remain a giant fish in a sea of minnows. 

These coalitions are not about you, dear reader

The country’s political future will be dominated by dynamic, flexible coalition structures that will ebb and flow over the coming four years to suit elected individuals rather than the citizenry. In the months prior the election, this writer heard all manner of potential post-election tie-ups including the ANC plus one or two minor parties; the ANC plus DA; the ANC plus EFF; and the DA plus the rest, ex the ANC and EFF. This observation can be fleshed out by ‘borrowing’ a paragraph from one of your writer’s recent FAnews newsletters, titled ‘Economic woes leave financial advice pros feeling woozy’. It reads: 

Recent opinion polls hint at significant uncertainty around the outcome of the election. An election upset in which the ruling ANC secures less than 50% of the vote would leave parties scrambling to figure out post-election political alliances, perhaps forming loose coalitions to govern. Outcomes will vary based on the makeup of these alliances: ANC plus smaller parties will extend the status quo, delivering market-neutral outcomes; ANC plus DA will lead to market friendly policies; and ANC plus EFF will lead to increased fiscal spending and the accompanying risks to the country’s sovereign credit risk. 

“The greatest dilemma lies in the tendency of parties to chase an electoral win first, before considering any form of cooperation or collaboration; this ‘me first’ mentality has undermined the efficacy of coalition governance [with such] arrangements being even more complex at the Parliamentary level,” Naidu lamented. This lament can be unpacked under the Kingmaker Syndrome (KS), a construct this writer reckons he has just invented. 

Under KS, representatives of fringe parties, having won only a handful of seats in a city or municipality, align with whichever party offers the highest reward. Put another way, they sell their vote to the highest bidder. Suddenly, the mayor of your city gets elected with a mere 1.5% of the vote. South Africans have been subject to the best and worst of coalition politics. More recently, the shenanigans in Ekurhuleni, Johannesburg and Tshwane districts have illustrated the ugly side of coalitions including instability, policy compromise and reduced accountability. 

A proper, enjoyable rant about government

The coalition conundrum was discussed by financial journalist Bruce Whitfield during a presentation to an RGA economic outlook webinar earlier this year. Aside from a warning the audience not to trust the myriad pre-election polls, Whitfield said “the future of local politics, at least for now, most certainly involves coalitions”. He noted that the composition of these coalitions depended on how far ANC support fell, and which of the smaller parties fared best. Whitfield used the platform to have a proper rant about government, which this writer thoroughly enjoyed. You can read more in ‘Navigating your advice practice in a mega-threat decade’. 

Unfortunately, the more things change, the more they remain the same. In its pre-election sentiment, PSG Insure led with; “As South Africa celebrates 30 years of democracy and prepares for the upcoming elections, socio-economic challenges remain, such as low economic growth, high unemployment and widespread inequality”. You could have appended this introduction to pre-election commentary in 1994, 1999, 2005, 2009, 2014, etc … and every five years into the future. 

PS, the non-life insurer’s piece focused on the risks to businesses and households of a repeat of the country’s July 2021 civil commotion, a R50 billion loss event the country can ill-afford a repeat of. But that, dear reader, is a story for another day.

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