South Africa’s GNU at breaking point

South Africa’s Democratic Alliance is deeply divided about staying in the country’s ruling coalition following a standoff over the budget.  

The DA, the second-largest party in the so-called government of national unity after the ANC, 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 was 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 the May elections, and is 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.

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 could 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. 

But last week’s vote shows 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 slipped on Monday to its weakest level against the dollar in more than a year — hurt in part by the broader market reaction to US President Donald Trump’s trade tariffs.

Some say the currency is currently 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.

“The more pressing near-term risk to the rand: a tightening of financial conditions is now underway. The rand is procyclical and at risk in the context of global shocks,” she said.

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.

Still, members of the DA party’s decision-making federal executive are on standby for a sitting expected to begin around 6 p.m. Monday to discuss options, two of the people said. It will follow a meeting last Tuesday between DA leader John Steenhuisen and President Cyril Ramaphosa.

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 are 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.

Another factor is a DA leadership conference ahead of the vote, where Steenhuisen may face criticism for his role in backing the move to join the GNU — an alignment that could spell the end of his stewardship.

Maneuvering behind the scenes is already taking place and several potential successors have been informally approached, the people said. But 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 favouring an immediate exit from the government argue that the party’s next leader will need time to regroup before the 2026 elections.

Within the ANC, sentiment has also turned against the D,A with early supporters of its involvement in the government, including finance minister Enoch Godongwana, having grown frustrated with what they view as a party behaving as if it has forgotten it is still a member of the administration.

“You can’t have an opposition inside government where people constitute themselves as an opposition inside government,” Godognwana said after he delivered the budget to parliament last month.

“In the cabinet, we are cabinet ministers and ministers of the state. You don’t represent political parties. The moment people come in the cabinet as not ministers of the state and delegates of a party, it’s no longer a government of national unity,” he said.

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 is meeting Monday but is unlikely to take a decision to force the DA to leave government, said two people with knowledge of deliberations.

The general preference on the committee is that the DA be left to make any move of its own accord, they said.