Election 2009: ANC Under Pressure to Deliver Following Sweeping Victory in South Africa

The ANC won South Africa's fourth general election ,held on 22 April by a comfortable margin, giving the party a fresh mandate to govern the country for the next five years. According to the final results issued by the Independent Electoral Commission (IEC) released on Saturday (25 April), the ANC won the ballot by taking 65.9% of the vote in the election for the 400-seat national assembly, slightly short of the crucial two-thirds (66.7%) margin that would have allowed it to amend the constitution unilaterally if it wishes to do so. The liberal Democratic Alliance (DA) party, which was the ANC's official opposition in the last two parliaments, finished as runner up by garnering a 16.68% share of the vote, ahead of the recently formed Congress of People (COPE) party, which came a distant third with 7.42%. Leading the "also-runs" is the once powerful Inkatha Freedom Party (IFP), which came fourth with 4.55%, ahead of the Independent Democrats (ID) with 0.92%, the United Democratic Movement (UDM) with 0.85%, Freedom Front Plus (FF+) 0.83%, and the African Christian Democratic Party (ACDP) 0.81%, respectively. Turnout for the vote was estimated at around 77%.

Changes in the Political Landscape

Whilst the ANC, albeit with a slightly reduced majority, was able to maintain its dominance of the South African political landscape, having lost some votes to COPE—which was formed by disgruntled former members of the ANC late last year—it is the smaller parties that appeared to have been affected by the latter's emergence. Parties such as ID, UDM, FF+, ACDP, the Pan-African Congress of Azania (PAC) and the Azanian People's Organisation (Azapo), which all held seats in the third parliament, have suffered major loses, with the latter two, whose share of the vote has collapsed to 0.27% and 0.22% respectively, seeing their parliamentary presence now reduced to a single seat.

The once powerful IFP appears with the latest results to be in a seemingly irreversible decline in popularity, from the highs of the 1990s which saw the party secure a 10.5% share of the vote at the country’s first democratic election back in 1994, with the number of IFP MPs now being reduced to just 18 from 28 during the last parliament. In total, out of the 26 parties that contested the election for the national assembly, only half have been able to win seats in the 400-seat chamber, led by the ANC with 264 seats, compared to the 279 during the third parliament, followed by the 67 (50 in 2004) and 30 seats won by the DA and COPE, respectively.

The parallel election for the nine provincial assemblies also saw the ANC emerge as the overall winner by winning control of eight, with the DA winning outright control of its stronghold of Western Cape assembly for the first time in its history.

Zuma Set to Become New President

Following its resounding electoral victory, the ANC is now set to pick its controversial and colourful President Jacob Zuma as the country’s next head of state in the wake of its resounding electoral victory, when the fourth parliament holds its first meeting on 6 May 2009. Despite his colourful past and well-documented recent legal problems, the former Deputy President Jacob Zuma has been the country’s presumption president ever since the ANC chose him as its leader back in December 2007, leaving the formalities of the parliamentary vote. Zuma has admitted that the ANC will be under pressure to deliver on key areas such as jobs, education and healthcare following the ANC's "resounding victory", with investors also eyeing the new Zuma-led government to see if it will maintain the country's current market-led economic policies.

In the run-up to the election Zuma, although staying vague about specific policy actions, made an effort to ease foreign investors' and business fears by emphasising that the successful economic policies will be entrenched by the new government. This referred to prudent monetary and fiscal policies that have helped the South African economy to display a high level of resilience to the recent global financial market fall-out. This rhetoric was echoed by senior party officials such as the party's secretary general Gwede Mantashe and ANC-treasurer-general Mathews Phosa. Both emphasised the importance of economic stability although stressing the need to increase government spending where necessary.

Manifesto Pledge

The ANC election manifesto to a great extent spells out the ANC-economic policy underlay. The manifesto suggests five priority areas. These include the creation of decent work and sustainable livelihoods, education, health, rural development, which includes food security and land reform, and lastly crime prevention. Throughout the manifesto employment creation plays a central role and is set as the primary focus of their economic policies. Fiscal and monetary policies are said to also "actively promote the creation of decent employment, economic growth; reduce income inequality and other developmental imperatives". Emphasis will be placed on the real economy with industrial policy the centre of its policy framework. The idea of a developmental state is promoted to help achieve these goals and most of the plans set out point to greater government involvement in all areas of the economy.

Fears for business stems from the "expanded" mandate of the monetary authorities to include job creation in the inflation targeting regime, increased government spending and of course a higher level of government intervention in the economy. The ANC's loyal alliance partners the South African Communist Party (SACP) and South African Trade Unions (COSATU) have been aggressively propagating these policy implementations and a convincing majority for the ruling party, with added impetus from the alliance partners, could lead to efforts to implement policy changes.

Outlook and Implications

Due to the internal difficulties that led to the formation of COPE and the growing public resentment against the ANC, the just-concluded election was expected to be the most competitive in South Africa's modern history. Such a prophecy however failed to pass, allowing the governing party to maintain its dominance of the country's political landscape following what has been a difficult third term in office. The party will be relieved to have completed what at the end was a quite comfortable electoral victory in the parliamentary election, even though it recorded its lowest share of the vote since the first democratic election in 1994, when its popular support stood at 62.65%. Many blame COPE's failure to mount a credible campaign and its failure to successfully communicate its message to poor black voters, as well as the DA's continued failure to extend its appeal beyond its core largely white and Asian voters as the main reason for the ANC's continued success. Although the ANC's losses are relatively small to worry its leaders, the party will however be foolish to ignore the message sent out by the electorate, that it will need to improve on its delivery on key issues.

Much uncertainty about the new government's future economic policy actions currently exists. Zuma's election rhetoric offered little to point in a specific direction. The main question remains to what extent future policy actions will be influenced by his close ties to his alliance partners, COSATU and SACP. This will only become clear after the announcement of his new cabinet in the coming weeks. Should prominent posts be allocated to senior party officials from the alliance partners, the swing in policy direction will most certainly be towards more government involvement in all areas of the economy. A tolerance for higher levels of inflation, as "pure" inflation targeting comes under threat, could lead to short-term stimulation of economic growth that will manifest in large current-account deficits and a weaker currency, while higher government spending will raise government debt levels. This could negatively affect the country's credit rating and deter much-needed foreign capital inflows. So far the effect of a peaceful and well-organised election benefited the markets, which showed the currency remaining firm. IHS Global Insight, while remaining positive that sound macro policies, which benefitted the economy in the past will prevail, will monitor future political developments with interest to gauge the development of future economic direction.