The ANC is central to any government going forward as the party will, despite declining support, remain the dominant party in South African politics after the election.
These comments are from Nedbank CEO Mike Brown, who told CNBC Africa on the sidelines of the World Economic Forum that it has become increasingly difficult to present the case for investment in South Africa.
“It is about presenting the South African investment story. It is difficult right now – absolutely. But, we do have a story to tell about how we are fixing the electricity crisis, logistics, and crime and corruption,” he said.
“I think the big picture story for South Africa is a country with extraordinary potential from mineral resources to tourism to the financial sector.”
“At the same time, the real-world delivery over the past few years has been poor. Economic growth has fallen to below population growth.”
While the major hurdles to strong economic growth are the electricity shortfall, the logistics crisis, and crime and corruption, a set of longer-term issues are starting to become prevalent.
These include the deterioration of water infrastructure, resulting in parts of the country having access to no water or unsafe water, and the country’s poor government education system.
This is largely due to a collapse of state-owned enterprises and state-run institutions, which has led many to believe the country needs political change and that change will occur in this year’s elections.
However, Brown does not believe the ANC can be dismissed as a political force, and its policies will continue to be those of the national government for some time.
“If you stand back and look at it from a policy point of view, the polls may indicate the ANC is losing support, but central to any government going forward will be the ANC and the policies they currently have,” he said.
The ANC’s policies are largely correct in addressing South Africa’s major challenges but have taken far too long to implement.
“Certainly, as business, we would want accelerated delivery of government’s stated economic policies because that is what is hindering economic growth.”
Brown’s comments are similar to those from rating agency Fitch, which said the ANC could lose its majority in the 2024 election but said this would not lead to major changes in economic policy.
Under elevated socio-political risks, Fitch highlighted the ANC’s bid for power in the 2024 general election.
It said the ANC’s dominance over the country’s political landscape has been challenged since the party’s poor performance in the November 2021 municipal elections.
“We believe the party could lose its majority in the May 2024 general election, but this would be unlikely to result in major changes in economic policy,” the agency said.