ANC Support Plunges: South Africa Navigates Towards Coalition Government

South African parties are preparing for coalition discussions as the ruling African National Congress (ANC) appears likely to fall short of a majority for the first time in 30 years of democracy. The ANC’s vote share decreased to 41.9% from the 57.5% it obtained in the previous national election in 2019.

The pro-business Democratic Alliance (DA) stood in second place with 23.4%, while uMkhonto we Sizwe (MK), a new party led by former president Jacob Zuma, secured 11.3%, garnering support from the ANC, especially in KwaZulu-Natal, Zuma’s home province. MK surpassed the Marxist Economic Freedom Fighters (EFF), currently the third-largest party in parliament, which held 9.5% of the vote.

There is much speculation regarding which party or parties the ANC might engage with to establish a coalition and sustain governance, as well as potential undisclosed negotiations. The uncertainty has affected the government bond market, with prices of the nation’s primary internationally traded bonds dropping by up to 1.3 cents against the U.S. dollar.

The parties’ proportion of the vote determines their representation in the National Assembly, which subsequently elects the next president. A poor performance in the elections could provoke a challenge to leadership. Concerns have been expressed by investors and the business community regarding the possibility of the ANC forming a coalition with the EFF, which advocates for the expropriation of white-owned farms and the nationalization of mines and banks, or with Zuma’s MK, which also discusses land seizure.