Sean McLaughlin: South Africa the sleeping beauty – GNU is the last chance
South Africa stands at a critical juncture as the recently formed Government of National Unity (GNU) offers a new path forward. With the ANC's diminished power and centrist parties stepping up, there is cautious optimism for reform. However, challenges like high unemployment and lingering populist policies remain. The country's diverse economy and independent judiciary offer hope, but patience is waning, and politicians must act swiftly to prevent disillusionment from pushing voters toward more extreme alternatives.
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By Sean McLaughlin
The mood in SA recently has been one of 'dejavu-cautious-optimism'.
A false dawn occurred in 2018 as Mr Cyril Ramaphosa became President. Yet reform may be easier now with a lesser African National Congress (ANC).
The recently formed centrist Government of National Unity (GNU) may be SA's last chance to be the global star of the south.
Politicians should remember that there is a lag time from economic dips to punishment at the polls. There is also a lag time until reforms are felt.
Despite the world's highest unemployment rate at 33%, surveys have consistently confirmed most voters to be moderate. Though that may not last.
Global Unemployment Data. Data provided by the World Bank (2024) and prepared by Our World in Data.
A recent poll from the Social Research Foundation (SRF), a think tank, shows growing support for the GNU parties.
Yet it also warns that a,
"critical mass of voters, if … dissatisfied with the performance of the GNU, could flip the balance of power in South Africa's politics in favour of a future populist, leftist administration."
That would be understandable for a 30-year-old 'born free' who lives in her uncle's garage.
Voters can seem patient until they are not.
In the US, voters elected Mr Obama twice, then Mr Trump. In the UK, voters elected Mr Cameron twice, then voted for Brexit.
Frustration of the struggling lower middle rarely leads to people voting for the 'Economic Competitiveness Party.'
Progress
SA has been lucky to get a mention in analysis of 2024's election world tour. The beauty still sleeps.
The ANC lost its national majority in May 2024 for the first time since 1994, with 40.18% of the vote. It formed the GNU pact with the centrist Democratic Alliance (DA, at 21.81%), and smaller parties.
It did not fully enter public mind until the months before the election that an ANC-DA tie up of sorts may be brewing, even if they seemed awkward bedfellows on the surface.
Yet politicians on both sides knew from around a decade ago that this would be something to prepare for.
And they did.
That the deal was struck was a miracle.
Within a lightning-fast two weeks, ex-adversaries signed in the dying seconds. Within the 'statement of intent', are conditions such as 'sufficient consensus'.
This guides that decisions should be made with 60% of seats in the national assembly. The ANC cannot, then, bypass the DA and ram through policies with smaller parties.
This may curb the ANC's worst ideas.
Currently, harmful legislation is being tempered. For example, a reckless proposal to nationalise high-performance private healthcare – the NHI – is currently held up in the courts.
The higher courts remain fiercely independent despite 30 years of ANC rule.
And the above act is among the last populist dregs of a liberation movement losing power, signed into law in the previous parliament, when the ANC had 57.50%.
Going forward, bills will need a centrist nod.
In a sense, SA is coming out of the woods. No single party is likely to command a large majority again, and the country's democracy remains firmly intact.
Policy – Partners in prosperity?
The potential for win-win agreements between the ANC and the DA is overlooked.
The DA can oppose an extreme ANC policy and offer productive alternatives.
This presents an opportunity to temper extremes of policy which have plagued other countries.
It could unfold something like,
"We want Expropriation Without Compensation of land (EWC) off the table, but we will entertain some sort of Land Value Tax (LVT), to fund social housing…"
One wonders if these conversations are already happening.
Minister Solly Malatsi has proposed Elon Musk's Starlink could enter SA by bypassing harmful Black Economic Empowerment (BEE) laws, suggesting alternatives like contributions to schools.
As the main economic ministries are in ANC hands, such 'sidestepping' obstructive parts of the ANC may be the path forward.
The Economic Empowerment for the Disadvantaged (EED) 'scorecard' has long been a brainchild of SA's Institute of Race Relations (IRR), a think tank.
This could open the floodgates to scrap BEE and other job-killing laws.
Any formal employer in SA survives despite the edifice of legislation, not because of it. At the relaxing of such laws, these firms sit ready to rocket, as do tax receipts from job growth.
SA's short walk to prosperity lies in normalising the labour market, in the same way that President De Klerk bonfired race-based legislation in the early 1990s. The Free Market Foundation (FMF), a think tank, has proposed an exemption 'card' from these laws to get young people into work.
The political centre
The damage to the country can start to be reversed, with better oversight in half the GNU ministries.
Plans are afoot for 2% vote thresholds at all levels of government. This will prevent the hyper-fragmentation which has made governance very, very difficult, particularly at municipal (council) level.
SA has three levels of representative government: municipal (257 local councils); provincial (9 legislatures), and national.
Tiny parties have been able to collapse city councils across the country, hampering service delivery and faith in democracy, even if the main reason those attempts failed is that the centrists lacked the numbers.
The centrists stand to do well in the local government elections (LGEs) of 2026.
For the first time, major cities of Durban, Johannesburg and others may get stable, centrist local governments. Talks are ongoing to stabilise these 'metros', possibly through confidence and supply arrangements.
SA has largely passed the test of the liberation movement conceding power.
Of the three major provinces, one has long been in the hands of the DA (Western Cape). The historically violent KwaZulu-Natal is seeing impressive stability with a four-party coalition.
The last battle, then, is in the most populous and productive province of Gauteng and its constituent municipalities (including Johannesburg and Pretoria).
Factions within the ANC's Gauteng provincial structures and its Premier Mr Panyaza Lesufi are unhappy that a deal was struck with the centrists at a national level. They are more inclined to side with the far left.
There may be skeletons in the closets of the provincial legislature.
Yet this offers an opportunity for a landmark national deal between the ANC and DA broadly.
Corrupt individuals could be granted conditional amnesty – immunity in exchange for full disclosure. In return, the ANC scraps BEE and race-based legalisation. I wonder if this has been floated behind closed doors.
Mr Lesufi's rise to ANC top spot and possibly President by 2027 is a threat to the GNU. That may re-run 2024 – collapse the GNU, team up with the far-leftists and destroy things.
Yet it could also be the catalyst for a new centre left party or smaller party consolidation, with national elections only two years later in 2029.
Markets would be an ally, having forced the removal of an unpopular finance minister in 2015, and the shortest serving British Prime Minister ever in 2022.
Finding the way
SA has unparalleled economic diversity, from data centres to a deep financial sector, agriculture, outsourcing, and car manufacturing.
Tourism thrives from wine tours in the Western Cape to luxury safaris in Limpopo.
Harmful legislation has meant mines have gone undug for so many years. A renaissance could play a key role in the green energy transition.
Diversity – the key to any country's energy security, is found in SA's abundant sun, wind, nuclear and coal.
Prospective development is endless.
Offshore oil and gas may hold some of the world's largest reserves. A national education and business fund for the black population could empower the youth and promote systemic redress. A diaspora ministry could engage millions of South Africans abroad.
The retreat of the government has seen capable private actors fill the void. They sit ready to assist a newly willing 'lean' government from policing to water provision.
Yet, returning to the warning, such vitality may come to nothing if positive pathways to development are not pursued.
The sleep beauty may become a monster.
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*Sean McLaughlin has worked in market intelligence on Latin America and Spain between 2016 and 2020. He wrote extensively on the issue of Northern Ireland in the EU-UK Brexit negotiations for think tank VoteWatch Europe. Since 2021, he has been working as a data analyst for a data provider in the energy industry.