South Africa prepares for elections during which the ANC could lose power

Some 30 years after the peaceful transition from apartheid to democracy, South Africa may once more be on the verge of change.

Since coming to power in South Africa's first democratic elections in 1994, the African National Congress has focused on making inclusivity a mainstay of the country's economy.

But its efforts to boost living standards for the disadvantaged haven’t at all times been successful, and Wednesday's election is more likely to weaken the party's dominance.

Current opinion polls indicate that the ANC's share of the vote under President Cyril Ramaphosa could fall below 50 percent for the primary time.

Although Nelson Mandela's party won 57.5 percent of the vote within the last national election, it was already in peril of losing its stronghold in key regions similar to Gauteng, the country's economic center.

Of the 62 million inhabitants 27.6 million South Africans are registered to vote. Voter turnout might be a cause for concern as voter fatigue increases.

In the last National Assembly election in 2019, voter turnout was 66%, already 7 percentage points lower than within the previous election. Even with the very best possible turnout, the ANC's result’s more likely to fall below 50%.

The country is facing quite a few and systemic problems.

Africa's most industrialised power system has a weak power grid that has resulted in a whole bunch of hours of blackouts and hampered development and production.

In addition, the country is scuffling with an unemployment rate of almost 33% — one among the very best on the earth —, weak economic growth that won’t even reach the 1% mark this 12 months, and corruption scandals that time to weaknesses within the governance of the ANC and its allies.

In addition, the country has one among the very best violent crime rates on the earth. 45 murders per 100,000 inhabitants.

This time, voters have a much wider selection, as there are numerous more candidates available to them.

About 14,889 candidates in at the very least 70 parties are competing for 887 seats.

Although incumbent Ramaphosa is running again, his biggest rivals include John Steenhuisen of the Democratic Alliance and Julius Malema of the Economic Freedom Fighters.

All are facing a well-known opponent who could act as kingmaker on this election. Former President Jacob Zuma is currently the leader of uMkhonto weSizwe, a political party only founded in December 2023.

Zuma, who was sentenced to fifteen months in prison for failing to seem before a corruption inquiry, recently won a court case that permits him to run for parliament.

If the polls are to be believed, South Africa can have a coalition government for the primary time after the election results.

Analysts at Fitch Solutions expect the ANC to form a coalition with smaller parties “to remain the driving force in politics.”

However, they pointed to several unexpected – but possible – outcomes that might be negatively received by the markets.

“We continue to expect three alternative scenarios: a narrow victory for the ANC, a coalition between the ANC and the Economic Freedom Fighters (EFF), or a victory for the opposition Multi-Party Charter coalition,” Fitch Solutions analysts wrote earlier this month.

“While any coalition formation will pose headwinds for policymaking and negatively impact investor sentiment, we note that an ANC-EFF coalition would likely result in a significantly negative market reaction, negatively impacting bond yields and the rand.”