探討：Shosholoza, South Africa! （前進吧，南非！）(只提供英文版)

“Shosholoza! (Go forward)
Shosholoza, (Go forward)
Kulezo ntaba, (From the mountains)
Stimela siphume South Africa” (on this train from South Africa)

“Shosholoza” is a Nguni¹ song miners traditionally sung as they worked, in a call-and-response style, with one man singing a line solo and the group responding. The mix of miners is reflected in the mix of languages used—part Zulu, part Ndebele—and sometimes with different words included, depending on the singers. The meaning of Shosholoza is often considered to mean “Go forward or make way for the next man” in the context of a work gang, and it is universally recognized across the country and sung by supporters of the South African sports teams.

Momentous election results raise questions for investors

The 2024 election results² are in, and they are groundbreaking. The turnout was 58.64%, down from 66% in 2019. The African National Congress (ANC), which has dominated the country for three decades, has finally lost its majority, reduced to 40.18% of the votes. A combination of its failure to deliver basic services like electricity and water, and the poor economic performance that has resulted in one of the highest unemployment rates in the world, led to the ANC’s defeat.

But the damage was also done by factions that used to be inside the ANC. Jacob Zuma, the disgraced ex-president who was forced to resign in 2018 after a string of corruption scandals, won an unprecedented 14.58% of the votes via his new party, “uMkhonto weSizwe” (MK).³ Predictably enough, these votes came almost exclusively in KwaZulu-Natal, his home province and the second-most populous in the country. MK also hurt Julius Malema’s Economic Freedom Fighters (EFF), which obtained 9.52%.

In second place with 21.8% was the Democratic Alliance (DA). The DA  has been governing in the Western Cape since 2009 and is broadly considered competent, but in the context of South Africa’s tragic history of apartheid, is widely viewed as a “white party,” especially after the departure of Mmusi Maimane, the previous leader. However, in a country with a gross domestic product per capita of US$6,766,⁴ the racial element is less important than the DA’s policy platform of loosening labour laws, opposing the minimum wage and ending the Black Economic Empowerment⁵ (BEE) program introduced by the ANC, to redress decades of apartheid discrimination and economic exclusion.

What are the ANC’s options?

In our view, the obvious thing to do would be to forge a coalition with the Democratic Alliance, as together the two parties would have 62% of the seats. But that is unlikely, partly because of a sizeable portion of the ANC for whom doing a deal with a party with predominantly white leadership is unacceptable, and partly because of the DA’s economic liberalism.

For the ANC, a deal with Zuma’s⁶ MK would deliver a working majority, but it would be humiliating and costly. Humiliating because he was thrown out of the ANC for corruption, and costly because he will demand more influence than his 15% suggests. Next year, Zuma is due to stand trial for corruption in a 1999 arms deal. Against that, excluding MK could foment unrest as KwaZulu-Natal’s preference would be ignored.

A pact with the EFF is not enough for a majority, and investors would consider it as negative, as the party’s platform is Marxist-Leninist—pushing for nationalization and compulsory expropriation without compensation of land and wealth from white South Africans.

A coalition with both MK and EFF would reach 64% but would probably cost Cyril Ramaphosa his job and result in a realignment of the ANC away from fiscal and economic orthodoxy.

What does this mean for policy direction? And for international investors?

The outcome is binary. Investors recognize that any coalition with MK or EFF or with both will mean populism and a departure from economic orthodoxy, increasing the country risk premium.

It is worth noting that these parties require a two-thirds majority to change the constitution.  Although they would fall short with 64%, they could get over the line by getting agreement from several of the 14 other parties that won seats, if they wanted to. Were that to happen, logically, capital would probably flow out rapidly.

A coalition with DA could provide investors comfort in terms of economic policy, but we think it would be prudent to assume that there is a low probability of that happening.

A hybrid solution that could interest both the ANC and the DA might be to maintain a separation between these parties by having the ANC keep all the executive roles in a minority government and sign a “confidence and supply” agreement⁷ which would guarantee support for confidence votes and budgets.

In the eyes of foreign investors, that could appear to be a way of putting a check on the next ANC government by controlling the legislative agenda and supporting the ANC on a case-by-case basis.

So, for the ANC, it is now time for “Shosholoza”.