DA divided over staying in South Africa’s coalition – Bloomberg
Key topics:
DA split over remaining in GNU after failed VAT-for-policy budget gambit
Budget fallout raises pressure on DA leader, succession talks underway
ANC explores GNU reconfiguration as DA exit speculation intensifies
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.
If you prefer WhatsApp for updates, sign up to the BizNews channel here.
By S’thembile Cele and Ntando Thukwana
South Africa’s Democratic Alliance is deeply divided about staying in the country’s ruling coalition after a standoff over the budget.
The DA, the second-largest party in the so-called government of national unity after the African National Congress, voted against a key piece of budget legislation last week after failing to use an increase in value-added taxes as leverage to get backing for its policy proposals. The legislation passed anyway with support from smaller parties.
A group within the DA has always opposed being part of the GNU, formed after the ANC lost its national majority in May elections, and are now pushing to walk away. That’s according to three people familiar with its internal debate who asked not to be identified because they aren’t authorized to speak to the media.
A meeting of the party’s Federal Executive on Monday evening heard calls — including from members holding ministerial or deputy ministerial positions in the GNU — for the party to begin withdrawing from the coalition, the people said. No decision was taken.
The business-friendly DA controls 87 seats in the 400-seat parliament. The rand has fallen sharply amid investor concerns that the alliance’s collapse may push the ANC to seek support from the left-leaning Economic Freedom Fighters to stay in power.
That’s placed the DA under pressure to stick with the GNU from the business community and civil society groups, including the FW De Klerk Foundation.
Smaller Parties
Last week’s vote showed the ANC can probably retain power without the DA or the EFF by recruiting smaller parties like ActionSA and Build One South Africa — both led by former DA officials.
The rand remained under pressure on Tuesday after sliding to its weakest level against the dollar in more than a year the day before, amid a broader market reaction to US President Donald Trump’s trade tariffs. Some say the currency is more vulnerable to external events than domestic political developments.
“We expect that much of this is now in the price as the demise of the GNU does not threaten policy as far as we can see,” said Mamokete Lijane, global markets strategist at Standard Bank Group Ltd. “The more pressing near-term risk to the rand: a tightening of financial conditions is now under way. The rand is procyclical and at risk in the context of global shocks.”
The DA has said it won’t make a decision on staying in the government before the outcome of a court case the party brought to halt the budget legislation, with the hearing scheduled to start on April 22.
The view from those wanting to quit the power-sharing arrangement is that the party’s position has now become untenable and it needs to leave on its own terms.
Next year’s municipal elections is a key consideration, with some insiders worried that the DA won’t have a good story to tell voters unless it returns to the opposition.
Way Forward
Political analyst Lukhona Mnguni said the party is caught up between those that feel it’s losing its identity within the GNU, and those who argue they’ve delivered results in the government ministries where they have been handed responsibility.
“It is quite clear that in the DA universe there is disagreement about what is the best way forward in terms of participation in the GNU,” he said.
Another factor is a DA leadership conference before the vote. Steenhuisen may face criticism for his role in backing the move to join the GNU — an alignment that may spell the end of his stewardship.
“There is a sense that John is not the strongest leader that the DA has seen, and I think that puts him under severe pressure,” said Mnguni.
Maneuvering to line up a successor is already taking place behind the scenes and several potential candidates have been informally approached, the people said. At this stage, none are willing to come out against Steenhuisen.
The front-runner is viewed as Cape Town Mayor Geordin Hill-Lewis, but he will only consider contesting the role if Steenhuisen declares he won’t seek re-election, the people said. Other names being touted include former Tshwane Mayor Cilliers Brink and Siviwe Gwarube, the basic-education minister.
DA spokeswoman Karabo Khakhau declined to comment.
Those favoring an immediate exit from the government argue that the party’s next leader will need time to regroup before the 2026 elections.
Mnguni said that the DA’s legal challenge of the process leading to the adoption of the fiscal framework puts the ANC in a difficult position.
“The only leverage they have on the DA is to fire them from government. And I’m not so sure that they’ve got the guts to do that and carry it out, because it will probably backfire,” he said. “So the best bet for the ANC is for the DA to walk out.”
Within the ANC, sentiment has also soured on the DA, with some early supporters of its involvement in the government — including Finance Minister Enoch Godongwana — growing frustrated with a party they view as behaving as if it’s forgotten it’s part of the administration.
“You can’t have an opposition inside government where people constitute themselves as an opposition inside government,” Godongwana said after he delivered the budget to parliament last month.
‘No Unity’
“In cabinet, we are cabinet ministers, and ministers of the state,” he said. “You don’t represent political parties. The moment people come in cabinet as not ministers of the state and delegates of a party, it’s no longer a government of national unity.”
Godongwana also insisted that markets wouldn’t lose confidence in a government that didn’t feature the DA, saying that its “credibility” rested with the ANC.
The ANC’s National Working Committee also met on Monday and discussed ways to reconfigure the GNU if necessary. It steered clear of taking a decision to force the DA to leave government, said two people with knowledge of the deliberations.
The general preference on the committee is that the DA be left to make any move of its own accord, they said. The discussion will be pushed to the party’s National Executive Committee, its top decision-making body, which is expected to meet in the coming days.