The News

JOHANNESBURG – Leaders of South Africa’s ruling party are locked in intense tasks over who to partner with in a coalition government after losing the parliamentary majority it held for 30 years.

Several senior figures in the African National Congress told Semafor Africa the talks were intense with no obvious, easy solutions following a poor performance in last week’s general election. The party won 40% of the vote — well short of the 50% required to govern alone.

The ANC’s National Working Committee — which oversees the party’s day to day operations — held a meeting on Monday as one of the first steps of reviewing the party’s electoral performance and charting a way to a coalition government, according to one of the people close to the talks.

Options included forming a government with the main opposition Democratic Alliance, which is widely seen as market-friendly or, alternatively, working with populist political parties like the Economic Freedom Fighters and uMkhonto weSizwe, both of which are ANC offshoots.

President Cyril Ramaphosa’s future as head of state is a key part of the conversations because MK said his removal would be a condition of it joining the ANC in a coalition.

Know More

Ramaphosa, speaking after the results were declared by the electoral commission on Sunday, said all the parties share an overarching mandate to work in partnership with each other to build a country that is inclusive and prosperous.

“Our people expect all parties to work together within the framework of our constitution and address whatever challenges we encounter peacefully,” he said. “Each party emerges from this election with a mandate based on the commitments they each made to the electorate.”

The 14-day window to elect the next South African president started on Monday, after the Independent Electoral Commission officially declared the election results on Sunday evening.

The country’s parliament is scheduled to convene on June 17 for the election of the president and the speaker of the National Assembly.

Ramaphosa’s path back to power would be easier if the ANC chose the Democratic Alliance, which would support his candidacy when the country’s parliament meets to formally elect a president, several ANC insiders told Semafor Africa.

The ANC will insist on Ramaphosa continuing in his role as president of the country, the ANC’s secretary general, Fikile Mbalula, told reporters on Sunday. “If you come to us with the demand that Ramaphosa must step down as the President of ANC, that is not going to happen,” he said.

Sam’s view

This is a battle for the soul of the ANC, as all the options are diametrically different and would ultimately redefine how the party approaches governing. In order to reach an agreement, different factions of the ANC must first find a common ground. And, beyond that, they must then strike a deal with members of a rival party, or different parties.

The choice made by the ANC will inevitably leave blood on the floor because there will be winners and losers.

There is no precedent for coalition governments at a national level in South Africa. Nobody knows if the decisions taken in the next two weeks will form a lasting pact.

Ultimately the coalition parties could decide to go their separate ways in the coming years, as sharing power with other parties limit their access to patronage levers and attractive government positions.

The View From financial markets

The markets are treading cautiously and eagerly awaiting the outcome of coalition talks, said Ronak Gopaldas, a director at Cape Town based risk management consultancy Signal Risk.

“I think markets will be satisfied with any arrangement that keeps MKP and the EFF out of power at a national level,” he said.

The business sector needed predictability and stability to thrive, said Stavros Nicolaou, a non-executive director at Business Unity South Africa, a non-profit organization that represents the country’s business community.

“We are on the cusp of a completely different direction, away from fractious politics,” said Nicolaou, adding that BUSA encourages political parties to “put the country first” by working together.

“Coalitions in our cities tend to be driven by self interest and become fractions,” he said. “What we need now from our political parties and their leaders in particular, is to work for an environment that provides business and investors with certainty and predictability.”

Notable

• The ANC and DA would have to swallow policies they detest if they decided to pursue a centrist coalition, argues Ryan Coetzee in South Africa’s BusinessDay newspaper.