South Africa

Warning of social unrest under DA Moonshot Pact

If the Multi-Party Charter (MPC) is elected in the upcoming elections, the risk of protests, trade union strikes, and unrest in South Africa is severely elevated. 

This is according to research from Oxford Economics, which recently released the fourth Research Briefing in its scenario exercise analysing possible outcomes of the 29 May general elections.

In this scenario, the centre-right opposition to the ANC united in a coalition around the Democratic Alliance (DA) and secured enough National Assembly seats to form a majority and govern without the ANC or the leftist pan-African parties. 

In light of past election results and recent polling, this outcome is the least likely of Oxford Economics’s four scenarios to materialise.

In August 2023, seven parties formed the MPC for South Africa. Their number later grew to 11, but only four are currently represented in Parliament. 

The parties in the MPC collectively got a third of the vote in the 2021 municipal elections, so winning a majority this year would require a major shift in voter behaviour. 

That is why DA leader John Steenhuisen originally referred to it as a ‘Moonshot Pact’.

On economic policy, the MPC is committed to smaller government, greater private sector participation, and strong ownership rights protection.

Macro outcomes of this election outcome would be positive. South Africa would see widespread market euphoria as investors will be glad to see the back of the ANC. Local assets will likely rally strongly across the board. 

Oxford Economics expects the 10-year bond yield to drop into single digits in Q1 2025 under the MPC’s rule.

The rand is expected to rally from oversold levels, which moderates fuel prices and tempers inflation.

Investment will be the big driver of growth and also means exports will be higher than projected. Real GDP growth accelerates to 2.8% in 2026 and averages 2.4% p.a. between 2026 and 2030.

However, political regime risk is projected to be higher in this scenario. 

“The inexperienced and sometimes fractious incoming government faces pushback from ANC lifers in the bureaucracy and an unruly Parliament,” the report said. 

“South Africa’s overall political-economic risk profile worsens under an MPC coalition government scenario relative to our baseline. Still, risks should dissipate over time and are far lower than under our ANC-EFF worst-case scenario.”


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