ANC ‘auction’ could collapse South Africa’s government

President Cyril Ramaphosa is holding the Government of National Unity (GNU) together, with his replacement as the ANC’s president likely to spell the end of the coalition government. 

Despite his doubling down on failed ANC policies and lack of decision-making, Ramaphosa remains important for his ability to keep the Democratic Alliance (DA) as part of the GNU. 

His potential successor as ANC president, whether it be Paul Mashatile, Fikile Mbalula, or a dark horse, is likely to bring the GNU to an end in its current form. 

This is feedback from Efficient Group chief economist Dawie Roodt, who outlined the challenges of managing a coalition government and what challenges are posed by the ANC’s looming electoral conference in 2027. 

However, the end of the GNU may come before that as parties gear up for the local government elections next year and some members of the ANC call for the DA to be removed from the national government. 

Roodt explained that the only bulwark against this appears to be Ramaphosa, as he continues to be the glue holding the coalition government together. 

“The president is a really weak president. Ramaphosa is not a decision-maker. He is a consensus-seeker, which prevents him from taking important decisions,” Roodt told the State of the Nation podcast. 

“There is commission after commission, and he does not take action against corrupt elements within the government or to try to revive the local economy.” 

Overall, Roodt thinks Ramaphosa is not a very good president and is unable to act with the urgency South Africa’s decline requires. 

However, this does not mean that Ramaphosa is not crucial to the South African government and its future. 

“At this stage, he is crucially important to us because I think he is the glue that keeps the government together. I am referring specifically to the DA,” Roodt said. 

“If he is to be recalled as the ANC president or replaced at the party’s next electoral conference, there is a good possibility that the GNU will come to an end.”

“Who is going to be the next leader? Paul Mashatile? Fikile Mbalula? We know that they do not like the DA and would prefer to work with other political parties.” 

The ANC’s electoral auction

Investors are increasingly concerned about the potential for the GNU to collapse, with their focus being on the ANC’s succession planning. 

The end of the GNU, particularly the end of the DA’s involvement in the government, would effectively bring an end to the optimism surrounding the country’s political future created by the coalition’s formation in June 2024. 

Investor concern is primarily driven by the realisation that the GNU will need more time to implement its reform agenda, which is progressing very slowly. 

Old Mutual Investment Group portfolio manager Jason Swartz explained the potential outcomes of the ANC’s next electoral conference at the asset manager’s most recent quarterly update. 

Swartz said the ANC’s electoral conferences have functioned as an auction for the past twenty years, with whoever raises the most funding typically getting the top job and putting their allies in positions of power. 

However, the next conference is proving much more difficult to call, with no clear frontrunner emerging from the group.

The ANC has a succession challenge, with many of its current leadership already quite old and none of the current candidates carrying the weight, popularity, and prominence of Cyril Ramaphosa. 

Historically, the current vice president of the ANC would be expected to assume the top job at the next national conference. 

However, with suspicions of corruption surrounding the current vice president, Paul Mashatile, the path to the presidency appears to be wide open. Swartz said Mashatile also lacks significant support outside of Gauteng. 

Some of Mashatile’s competitors include the current secretary-general, Fikile Mbalula, who is ambitious and has strong support from the ANC’s Youth League. 

Mbalula, however, has a record of being an incompetent minister and is associated with a decline in the discipline of ANC members during his time as secretary-general. 

Less prominent candidates include Ronald Lamola, a rising star in the ANC who is seen as very capable but lacks strong support in the party. 

Panyaza Lesufi and Electricity Minister Kgosientsho Ramokgopa are also rumoured to be potential candidates.

Both of these candidates would bring an end to the GNU, as the DA has made it clear that it would not support members of the Communist Party for president.

“The 2027 ANC national conference is going to be a wild card in terms of the GNU’s future. There is very little insight for investors to work with,” Swartz said. 

“This, for us, kind of puts a time period on the viability of the GNU, particularly if the ANC President is not aligned to the philosophy of the coalition.”