South Africa

Warning of five tough years if South Africa goes the ‘Chernobyl route’

Political and economic experts said South Africa has a historic opportunity to improve the country through an ANC and DA alliance.

However, should the ruling party form a partnership with the EFF and MK parties, the country will be punished and is in for a tough five years.

Dr Frans Cronje, who accurately predicted the outcome of the 2024 national election, said South Africa is at a crossroads.

He said if the ANC surrenders President Cyril Ramaphosa and lets the EFF and MK back in, it would be Chernobyl for the ruling party and the country.

“It will be harsh. The capital markets are going to hammer us. It will be a tough few years,” Cronje said.

However, the country will survive. It will also destroy support for the ANC and its partners, especially among the middle class.

It will further result in a surge of support for South African civil society groups to fend off malfeasance that will be cooked up.

“The aspirant middle class, which the ANC lost hope of avoiding annihilation, will be alienated, and the odds are the ANC doesn’t survive,” he said.

Cronje said after five tough years, the country will arrive at a place where it will be rid of the ANC for good.

“There’ll be a stark choice between absolute devastation, which is what the brand of the ANC will be, versus a clear alternative, which is what the centrist opposition presents,” he said.

He said a deal between the ANC and the DA would present a much better alternative for the ruling party and the country.

Another benefit is that the ANC and DA do not compete for votes in the same sectors of society. “They find it difficult to fish in each other’s ponds, so they won’t compete for votes,” he said.

He said the country has a historic opportunity. “If we seize it, the upsides for the country are immense,” he said.

If the ANC and DA make it happen, South Africa can become one of the world’s most successful and enticing emerging markets.

Dawie Roodt
Efficient Group chief economist Dawie Roodt

Efficient Group chief economist Dawie Roodt said the rand and South Africa’s capital markets are much weaker because of uncertainty related to the elections.

Roodt said South Africa’s currency, capital markets, and stock exchanges are hugely undervalued.

A good news story, like an ANC and DA coalition, can significantly strengthen the markets and currency.

However, a bad news story, like an ANC, EFF, and MK coalition, could cause further damage to the country’s markets and economy.

He added that political options, although significant, are not the only factors influencing the South African economy.

The country faces big structural problems, like a lack of electricity supply and crumbling infrastructure, hampering economic growth.

“If there is a leftist coalition, these structural problems are likely to remain, causing further damage to the economy,” he said.

Policies with a leftist coalition will further call for expropriating assets, nationalising banks and the Reserve Bank, and taking mines.

Such policies will chase investors and businesses out of the country and cause tremendous damage to the economy.

However, the right political coalition can lead to policy change and future economic growth in South Africa.

“It is a choice of more or less state intervention in the South African economy,” Roodt said. “More state intervention is not good for the economy, and the inverse is also true.”

He said the local economy showed that the country needs less of what we have seen over the last thirty years.

“We need less state intervention. We need more protection of private property rights. We need a more free economy,” he said.

“If we want to save the economy, we need the right faction of the ANC to partner with the right opposition party.”


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