BNC London: Cronje Q&A – Coalition and electoral challenges post-May 29

At the BizNews Conference in London, Frans Cronje discussed the ANC’s electoral prospects, the influence of Jacob Zuma, and the dynamics between the ANC and EFF. He analysed the ANC’s strategic behaviour and potential alliances, emphasizing the pragmatic and cautious approach the party often takes. Cronje highlighted the complexities within the ANC and its resistance to extreme leftist policies, suggesting that despite internal and external challenges, a complete collapse of the ANC or South African governance is unlikely. He also addressed the implications for smaller parties and the potential for future political and economic recovery in South Africa.

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Summary of the Q&A session with Frans Cronje at BNC London

In a discussion at the BizNews Conference in London, Frans Cronje shared his insights on South Africa’s political landscape, focusing on the ANC’s position and prospects. He highlighted the strategic importance of Jacob Zuma’s influence, suggesting that Zuma could command around 10% of the vote, impacting both the ANC and EFF’s performance. Cronje explained that the ANC, despite internal divisions, aims to regulate rather than seize the means of production, contrasting with the EFF’s more radical approach.

The conversation delved into the potential alliances between the ANC and smaller parties, with Cronje emphasizing the ANC’s pragmatic nature and tendency to retreat when facing strong resistance. He noted that the ANC might strike deals with minor parties to maintain power, but internal corruption and ideological shifts could complicate this.

Cronje also discussed the strategic challenges the ANC faces, including the risk of becoming a rural, regional party if it fails to adapt to the aspirations of the urban middle class. He expressed cautious optimism about South Africa’s resilience, citing the country’s natural immunity to bad governance and the potential for economic recovery.

On the topic of the National Health Insurance (NHI) bill, Cronje argued that the ANC’s actions are driven by the balance of forces. If the business sector strongly resists, the ANC might reconsider its stance. He criticized corporate South Africa’s lack of firm resistance, suggesting that effective opposition could force the ANC to change course.

In summary, while acknowledging the risks of an ANC-EFF alliance and potential policy missteps, Cronje remained optimistic about South Africa’s long-term prospects, provided there is strategic resistance to misguided policies and a focus on preserving liberal democratic values.

Edited transcript of the Q&A session with Frans Cronje at BNC London

Alec Hogg [00:00:07] I know it because what you were saying, ANC can be back to 50%. That’s very different to what most people are saying.

Frans Cronje [00:00:15] Well, until two years ago, everyone in the polling world had them at 47, 48, 49, 50, 51, 52. The only reason they’re not there is that Mr. Zuma has taken a chunk of them, and a big chunk out of the IFS. Now he’s very capable. Zuma is serious about going to war on this stuff. He’s very popular in South Africa. I’ve spoken to people in high places in South Africa, and they exclaim, “It’s impossible. How could anyone vote for that man?” But he’s cast himself well. It’s not his policies or manifesto that win support; he’s cast himself as the fallen comrade, the hero who is flawed but relatable. He’s now been maligned and persecuted by a distant and aloof ANC that’s more comfortable in the glistening towers of Sandton. This resonates with a substantial number of voters. As long as he can hold that, he can approach 10% of the vote in this election.

Alec Hogg [00:01:51] So if he takes 10% and the EFF takes 10%, how’s the ANC going to get close to 50%?

Frans Cronje [00:01:59] If he takes 10% and the EFF takes 10%, let’s say he’s eating into the EFF’s share. The EFF might do about 9%. The ANC sits in that 45 to 50 band. We need to understand that the EFF and the ANC might look the same, but they represent two fundamentally different strains of the liberation movement. The ANC aims to regulate the means of production to the state’s advantage, not to seize it. The EFF wishes to seize it, even if it means destruction, to build a utopia. The ANC is conservative when it runs into trouble, whereas the EFF will proceed regardless of resistance. This division within the ANC is well understood. There’s resistance to an ANC-EFF deal because it would mark a profound shift in philosophy and could be destructive. It would also cause internal division over patronage. If the ANC strikes a deal with the EFF, it would compromise their leadership and philosophy.

Alec Hogg [00:06:09] There is a school of thought that anything below 50% would be perceived internally as a failure for the ANC. Hence, they might recall yet another president and the new president might be more aligned with the EFF. How high would you put that likelihood?

Frans Cronje [00:06:34] The joke now is 45 is the new 70. If they get to 45, they will strike a deal with smaller parties. But there’s a serious prospect that the compromised will overwhelm even that. The ANC and EFF together would be disastrous, leading to a lack of growth and jobs recovery, accelerating their collective support’s downward trajectory. The only way they could survive would be by ensuring no free elections or printing money to create inflation. However, it’s more likely that South Africans and institutions will defeat them. Pushing the ANC and EFF together might expose their failures by the next election, leading to a clear choice for voters and possibly splitting the ANC. Ramaphosa’s departure would also significantly impact their support. So, even with an ANC-EFF deal, there are still upsides for the country.

Alec Hogg [00:11:17] You’ve given us some scenarios. Despite past pessimism, you’ve been upbeat recently. People might wonder if South Africa will become another Zimbabwe. What would you say to someone considering taking their skills back home to contribute to the country?

Frans Cronje [00:12:17] The method we apply today is the same as before: understanding history, politicians’ motivations, and data. South Africa is becoming a normal, highly volatile emerging market. It won’t have a short-term recovery but has strong enclaves that could hold the middle classes indefinitely. The outlook for absolute collapse and catastrophe is not where it’s at.

Alec Hogg [00:14:17] We’ve had questions. Simon asks about the prospects for smaller parties like the Patriotic Alliance and ActionSA in this election.

Frans Cronje [00:14:43] Measured data shows that parties like Rise Mzansi have limited prospects, under 1%. The Patriotic Alliance, led by Gayton McKenzie, is more serious. He resonates with the Western Cape’s demographics and could become significant. Herman Mashaba’s ActionSA is polling low but could have done well with better positioning and funding.

Alec Hogg [00:17:39] Can you comment on the impact of the National Health Insurance Bill?

Frans Cronje [00:19:34] The ANC advances when it perceives the balance of forces as enabling. If there’s resistance, they step back. The healthcare industry needs to take a firm stance. If the ANC sees strong resistance, they will stop and reverse, aided by pragmatists within the party.

Alec Hogg [00:23:01] Do you think big business feels betrayed by Cyril Ramaphosa and his new approach?

Frans Cronje [00:23:12] No, I don’t think so. There’s even sympathy within business. The issue is that corporate cash deposits have increased, but to free it up, you need certainty, especially regarding property rights. The ANC’s approach to balance of forces can be leveraged to influence policies positively.

Alec Hogg [00:26:25] Wendy asks how we can harness business power for change.

Frans Cronje [00:26:41] Get the analysis right. Understand the ANC’s operation and respond appropriately. Not necessarily to bring them down, but to influence their policies. A ten-year process towards a centrist party is safer than an abrupt change without a clear replacement.

Alec Hogg [00:28:34] Some people think they can do a good job. Jan asks where one should vote to preserve liberal democratic objectives for South Africa.

Frans Cronje [00:28:52] Look for parties that reflect liberal Western democratic values, like the DA. However, be aware of the potential dangers of an ANC collapse without a clear replacement. The choices are clear, but the process is complex.

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