South Africa

Limiting coalitions best for South African businesses – Capitec CEO

Capitec CEO Gerrie Fourie said limiting coalitions after the elections this year would be the best for South Africa from a business perspective.

South Africans will vote on 29 May in what has been called the country’s most uncertain elections since the dawn of democracy.

This is because polls indicate that votes for the ruling ANC could dip below 50% for the first time in 30 years. 

Many believe this will see the ANC partner up with smaller parties to form a coalition government and stay in power.

Fourie said that while they are keeping an eye on the elections, it is not a major concern “because there are so many permutations and so many possibilities”. 

“Let’s see what happens on that day and then take it from there. I think we are in for uncertainty.”

However, he said, “From a business perspective, if coalitions are limited, it will be the best for South Africa”.

He explained that decision-making is slow with coalition parties, and South Africa does not have a good record with them.

Capitec CEO Gerrie Fourie

Many South African business leaders believe the 2024 elections will not result in significant policy changes as the ruling ANC will remain the dominant political force, and its reform agenda will remain in place.

Standard Bank Group CEO Sim Tshabalala said in the company’s latest annual report that its base case is that the country’s policies will remain largely unchanged.

“Our base case is that policy continuity will be largely maintained after the election, including the current administration’s programme of structural reform, a path that will gradually improve South Africa’s economic performance,” he said. 

However, Tshabalala said uncertainty in the build-up to the election will limit investment in South Africa and, thus, economic growth. 

The bank’s South Africa CEO, Lungisa Fuzile, echoed Tshabalala’s statement that no fundamental changes are expected as a result of the election. 

“We do not anticipate that the election outcome will lead to a change in policy direction. Accordingly, the continued gradual policy reform should be growth-supportive over time,” Fuzile said. 

Standard Bank CEO Sim Tshabalala

Outgoing Nedbank CEO Mike Brown said on the sidelines of the World Economic Forum earlier this year that the ANC will be central to any future government in South Africa. 

The collapse of state-owned enterprises and state-run institutions 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.”

Rating agency Fitch also said at the beginning of the year that the ANC could lose its majority in the 2024 election but that this would not lead to major changes in economic policy. 

Under elevated socio-political risks, Fitch listed 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.


Top JSE indices