Coalition times: Constructing South Africa’s 7th administration

South Africa's newly elected parliament is convening today to select the country's next president, marking a crucial turning point for the nation. The African National Congress (ANC) has called for the formation of a Government of National Unity (GNU) but is navigating towards forming a coalition with the Democratic Alliance (DA) and the Inkatha Freedom Party (IFP). The path to this coalition has significant implications for the country, politically and economically. As experts analyze the potential impact of this coalition, it is clear that the process is still in the nascent stages. Michael Evans, a law expert from Webber Wentzel, explains that while discussions are underway, no formal coalition agreement has been finalized. The concept of a Government of National Unity, as discussed, may take the form of a confidence and supply agreement, similar to models implemented in other countries like Canada. Evans highlights the need for legislative frameworks to govern coalitions effectively. At the municipal level, the amendment of the Municipal Structures Act is being considered to establish guidelines for coalition governance, aiming to prevent past issues seen in certain municipalities in the country. Peter Attard-Montalto, Managing Director & Lead on Political Economy at Krutham, emphasizes the economic implications of the coalition agreement. He believes that the current agreement, despite being labeled as a GNU, is essentially a coalition that will require policy formation within six weeks. While certain key economic policies may see continuity, contentious areas such as the Department of Trade, Industry, and Competition (DTIC) policies and the National Health Insurance (NHI) scheme may spark disagreements during the policy negotiation phase. Looking ahead, Attard-Montalto acknowledges both the goodwill and potential challenges in the policy formation process. He foresees substantive debates on specific policies between the ANC and the DA, highlighting the need for compromise and sensible discussions to steer the country's economic direction. Regarding the role of the Constitutional Court in governance, Evans clarifies that the court's involvement in political matters, including coalition agreements, is minimal. While legal challenges may arise, particularly in relation to the electoral process, the court's role remains limited. As South Africa prepares to elect its new president, Evans outlines the voting process, emphasizing that a simple majority is required for a nominee to assume the presidency. He anticipates that Cyril Ramaphosa is likely to secure the presidency given the support from the coalition parties. In the context of global perception and market stability, Attard-Montalto underscores the importance of policy continuity and the rule of law. He notes that global investors are closely monitoring South Africa's political developments for signs of stability and commitment to key economic agendas. Overall, the formation of a coalition government in South Africa marks a significant milestone in the country's political landscape. The success of this coalition will hinge on effective policy negotiations, compromise, and a commitment to steering the nation towards economic stability and growth.