Transcript: Can South Africa’s national unity government succeed?

This is an audio transcript of the Rachman Review podcast episode: ‘Can South Africa’s national unity government succeed?’

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Gideon Rachman
Hello and welcome to The Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week’s podcast is about South Africa, where for the first time since the end of apartheid, the African National Congress will share power as part of a coalition government. My guests are Monica Mark, the FT’s South Africa bureau chief, and Alec Hogg, editor and publisher of Biznews.com in South Africa.

After the recent elections, there were fears that the country would slide into instability. But a coalition centred around the ANC and the pro-business Democratic Alliance came together quickly. So is this a new start for South Africa?

Cyril Ramaphosa voice clip
Now is the time to assemble all our capabilities and to direct all our energies to answer the call of the people of South Africa. We dare not linger.

Gideon Rachman
That was the moment when Cyril Ramaphosa was reappointed as president of South Africa. A second term for Ramaphosa was not entirely assured, since it led the ANC to a record low of just over 40 per cent of the vote. But when I saw the South African president in Johannesburg a week before the coalition came together, I was struck by his confidence that he was still in command of the political scene. One striking feature of the new coalition is that it’s excluded the most radical parties, the far-left Economic Freedom Fighters and the MK party, led by former president Jacob Zuma. The exclusion of those two parties is a big relief to liberals and to the business community, but it leaves some people worried about the future stability of the government and even the country. So I began the conversation by asking Monica Mark to describe the new coalition, who’s in and how is it going to work?

Monica Mark
We’re still waiting to find out some of the finer details of the coalition, but what we do know so far is that there are five parties in the unity government. The ANC essentially said that anyone who got enough votes and who wanted to join could join, and they’ve ended up with 273 seats out of South Africa’s 400 parliamentary seats. So that’s just over two-thirds of votes that were cast. And the key party in this coalition is the Democratic Alliance, the DA, who’ve been the opposition since apartheid ended. They’re also working with the Inkatha Freedom Party, the IFP, and there’s two smaller, newly formed parties called the Patriotic Alliance and Good. And what’s been quite interesting, I suppose, is the parties that have not joined. And they are two breakaway ANC parties: the Economic Freedom Fighters, EFF, and the uMkhonto weSizwe party, which was formed by former president Jacob Zuma just last year and was the kind of wild card of the party that ended up coming third with just under 15 per cent of the vote. They have not signed up. So there’s been kind of a sigh of relief, I think, certainly among investors, because those two parties, the EFF and the MK, are not market-friendly parties. They had a radically different idea of how the country should be run. So essentially what we’re seeing is the ANC and the DA is in a coalition together. And that’s kind of been sweeping with these other smaller parties also. But we don’t know who is going to have what positions. Presumably, there’s a lot of political horse-trading and dealmaking going on frantically in the background as we speak.

Gideon Rachman
OK. So Alec, Monica’s explained that a lot of people in business are relieved. You run Biznews.com. What is the mood in business? Because South Africa is growing very slowly. Its infrastructure is in a terrible condition. Things need to improve sharply. Do people feel any cause for real optimism, guarded optimism? How do you think people are thinking about it?

Alec Hogg
Gideon, from those that I’ve engaged with, it is a feeling of a second 1994. It is a second transition for the country, and it could very easily have gone the other way. Hellen Zille is the head of the Federal Council of the Democratic Alliance, former journalist, anti-apartheid journalist during the difficult times in this country, previously the premier of the Western Cape, where she did a fantastic job as well. So she’s got a terrific political pedigree. She gave a very strong presentation at a conference that we held back in September 2021, so nearly three years ago, to say that she believed that in 2024, the ANC would go below 50 per cent and that they would be a coalition government, and that the ANC would have to choose between the DA and the EFF. At the time, of course, as Monica mentioned, the Zuma party wasn’t even thought of.

And at that stage, she really put down what the DA’s non-negotiables would be: free-market economy, constitutionalism — in other words, we are a constitutional democracy, and to retain that — the rule of law, separate powers between the party and the state, all of which had become pretty fuzzy during the last 30 years when the ANC had, only for brief periods, managed the economy properly. The GDP per capita here has been falling for more than 10 years annually, with our population growth at 1.6 per cent and GDP at around 1 per cent at best. So this has been seen as a real breaking of the logjam. With the ANC above 50 per cent, it was impossible for Ramaphosa — even if he wanted to — to implement the kind of reforms he’s been talking about for a long time. With the ANC at 40 per cent, it’s very possible.

And the other big point about this is that the cabinet, we understand part of the negotiations was that it would be broken up in direct proportion with the number of votes that were received by the parties that are members of this government of national unity. And that would mean in a cabinet of, say, 16 people, hopefully, and many people are in South Africa saying, let’s reduce this massively bloated cabinet, the biggest in the world, down to something more manageable from over 30 to perhaps 16. Whether that happens or not, with all of the balls that Ramaphosa has got to juggle is uncertain. But it would give a proportion of, say, 10 ANC, five DA, one for the IFP. And the opposition parties or the free-market parties will certainly have a say. It’ll be more than that. Part of the agreement is the major decisions will have to be agreed by 60 per cent of parliament, which means that the DA and the ANC together will have to agree on things. And this could usher in a new dawn. Many believe that this is really the second transition for the country.

Gideon Rachman
Monica, do you pick up on that sentiment as well? And as a, you know, observer of many of the very entrenched problems that South Africa has, and you’ve written about the society from the bottom up, the challenges facing people and facing the very high levels of unemployment and crime and so on, do you think that there are easy wins, if I can put it that way, that the government can make progress rapidly?

Monica Mark
It’s not a secret that there’s an enormous amount of work for any incoming government has to deal with. That’s kind of just been festering for years. And inequality is staggering in this country. And unemployment, official figures are something like 1 in 3 people are unemployed. But, you know, unofficially, that is probably higher. I think it’s pretty clear that these kinds of problems are basically a threat to South Africa’s social stability. It’s not something that’s easy to turn around, but there are certainly some low-hanging fruit. The difficulty is gonna be that the DA and the ANC have different ideas of how to go about dealing with these problems.

So, for example, if we’re talking about unemployment, the ANC has said that one of its red lines working with the DA is that they are not going to get rid of the national minimum wage, but DA would like to do this because they sort of believe in free market. There’s a lot of faultlines that this new coalition government could trip over, but certainly, the obvious things that need to be dealt with are not rocket science to figure this out.

Load shedding, which is what South Africans call power cuts, has gotten worse and worse and were at a point, you know, last year where power in this country was so bad that more than 200 days of the year, there were power cuts. So the electricity reforms need to be dealt with rapidly because obviously, this affects everybody in the country, big businesses, smaller businesses and just ordinary people going about their lives. The government has said this is a priority for them. Infrastructure is also a problem. The ANC has given a list of their priorities of job creation, land reform. They want to focus on the promotion of fixed-capital investments, but that also depends on dealing with things like electricity and infrastructure development.

Gideon Rachman
OK, so Alec, Monica makes the point that although they’re non-coalition, the ANC and the DA have very different ideological perspectives. There’s the added complication that the DA is often portrayed as a white-led party and the ANC is the party of African liberation. Do you really think these two parties are gonna be able to work together?

Alec Hogg
Oh, absolutely. A lot is made in the media about racial differences, but on the ground in South Africa, it’s a very different situation. We have come a heck of a long way in the last 30 years, and so have the politicians. There’s a level of maturity within the opposition, in particular, where there’s an understanding that this is a turning point for South Africa. It’s a fork in the road. Being a liberation party has always brought some quite significant difficulties on growing the economy.

And I’ll just give you an example of this. Monica mentioned a moment ago about the power scarcities in South Africa. What happened about three years ago was that the ANC realised that it could not continue along the path that it had, and it changed the laws so that the private sector was allowed to build power supply of more than one megawatt. Up to then, if you were a mine like Sibanye, which is a very large platinum mine in South Africa — platinum to a large degree, gold as well — and they were trying to keep the deep level refrigerated, they had to rely on power blackouts, which meant that they could not produce, and they were not allowed to build their own power plants, because that was the dead hand of the ANC, driven by the SA Communist Party’s socialist ideas, whatever. When it was made obvious that this was causing more and more trouble in the country, and indeed the ANC was likely to get a real hiding at the polls in 2024, that regulation of one megawatt was removed. The private sector was brought into the party and we haven’t had load shedding now for nearly three months.

So it’s kind of getting to a point in South Africa where old ideology is being questioned and the practical implications of working together — public and private sector — in a meaningful way is becoming kind of part of the norm. And it looks like the South African politicians have become a lot more pragmatic, and they’re not gonna throw this opportunity away, because if they do, they will be very badly punished by the voting public who voted for this. The public has voted for a change, for something different or something better, and now they have to deliver.

Gideon Rachman
So Alec, it did strike me when I saw the president that, as I say, he seemed quite in command despite the electoral setback. And I wondered after we’d spoken — it was not something I put to him directly and I doubt he would have answered directly — whether in some strange way, the electoral outcome might even suit him because he’s on the reformist business wing of the ANC, which also had a very strong leftwing. In a funny way, being forced into coalition with a more pro-business party, does that kind of strengthen his hand as a reformer himself?

Alec Hogg
I think you are actually reading it very accurately. Gideon, he’s been the president now for what’s it going six, seven years? Ramaphosa is the absolutely top negotiator. He loves the collective. He doesn’t like sticking his neck out. And he’s been working the party to the degree that he now has the support of the majority of the roughly 100 people who make all the key decisions, the national executive committee of the ANC, it’s 80 people elected, plus the top six plus a few co-opted members. And he would have been working at making sure that he had the support of those people going forward.

In South Africa, something we don’t talk often about because it’s very politically incorrect, but we do have different groupings. You have the Zulus, you have the Xhosas, you have other people in South Africa who, you know, not that fond always of the Zulus and the Xhosas. It’s a historic, very complicated country. But when you look at it in that way, Ramaphosa has got the support of the National Executive Committee. Otherwise, he would have been recalled. They’ve recalled two presidents already and it wouldn’t be difficult for them to recall him as well.

So the ANC is now behind him. It might only be 40 per cent of the total population and not the 57 per cent or even higher than that where it started, but it’s a very solid and very strong 40 per cent. And his objective now is in getting his legacy right and his legacy will only come when you have economic growth. And he can see and I have many examples of this coming to me from very senior business people who are close to Ramaphosa, that there is an understanding that when it comes to governance, the DA does do it better and you don’t have to look too far. In South Africa we have nine provinces, one of which up to this point has been run by the Democratic Alliance. Over 90 per cent of new jobs being created are in that province, in the western province. So there’s a realisation within the ANC that these guys in the DA actually can govern well. Let’s bring them into the tent, let’s work with them and let’s get the whole country working.

Gideon Rachman
So Monica, I mean, that’s a lot of encouraging stuff for those who want to see South Africa begin to tackle its problems. But it does involve very deliberately saying, OK, EFF and the MK, which collectively had, you know, about a quarter of the population voting for them, are now on the outside. Are they now impotent or do we still have to watch out for what they might do? I mean, I’m thinking in particular of the violence that swept the country in 2021, when Jacob Zuma supporters basically ran riot. Is that threatened violence still there or other forms of instability? What kind of role do you see those two parties playing in the years ahead?

Monica Mark
Oh, I think they seem from what we’re seeing so far have taken quite different perspectives. Malema, who’s the leader of the EFF, his key strength has been kind of being a rabble-rouser and destabilising government. His MPs and his supporters would dress up in their red berets and red overalls to symbolise workers, and they would heckle when the president was doing opening of parliaments and state of the nation addresses. Malema has said he’s going to dial that back down. He’s seen what’s happened with the ANC, and he’s kind of maybe come to the realisation that for the EFF to survive, they’re gonna have to do something different than just being rabble-rousers. They might actually have to start being seen as a serious party.

And then, interestingly, Zuma has kind of almost stepped into the gap that the EFF has left behind. Although, to be fair, Zuma has been very clear from the start that the path he’s taken since forming MK has been as much about him getting into power as about destabilising the ANC, and there’s no signs that he is going to stop doing that. He gave his first kind of public statement on the coalition government, and he came out swinging, saying that he has evidence of vote-rigging, and the results are not actually a true reflection of the will of the people of South Africa. There was irregularities and so on, but he hasn’t given any of that evidence publicly. So the impact of what he’s doing is to undermine democracy, the democratic process. And depending on who you speak to, he has his own reasons for doing that but they’re sort of personal reasons that he needs to continue to have a seat at the table.

But I think that what we are seeing so far is that Zuma has no intention of coming on side and working with any of the parties that are now in power, whereas the EFF might have realised that to survive, to continue being relevant, you know, as Alec was saying, all of these people who have been in power are starting to realise they have to do things differently. And it might be that Malema and the EFF has started to realise that as well.

Gideon Rachman
And Monica, what do you think about the ANC itself? I mean, the portrait that Alec painted is of a Ramaphosa who’s very much in command, who understands the politics of his party, has the national executive committee behind him. But when I was in South Africa, there were some people who were saying, you know, there could be a challenge to Ramaphosa from the left if he begins to pursue these free-market reforms, which will upset the trade unions, the South African Communist party, which is still influential. Do you think the left are just gonna take this lying down and allow a reformist government to go ahead?

Monica Mark
I think Ramaphosa is definitely more secure now than he was a few weeks ago. That doesn’t mean that there are not so people within the ANC who disagree with him or want to see someone else leading the party. It is not a secret that there are factions within the ANC, as in lots of political parties everywhere in the world. There’s a kind of more left-wing faction of the party. Then there’s the kind of neoliberal, market-friendly wing of the ANC, which is led by Ramaphosa, who are much more aligned with the DA. There are also what some people kind of refer to as another wing of the ANC, the big unions in South Africa. COSATU is the obvious one.

It’s very difficult right now, kind of impossible, actually, to say how things will pan out with these various factions and different wings. And it’s also true that there is a lot of bad blood between not just factions in the ANC, but also with the DA as well. So for this to be successful, it’s gonna depend on these personalities and factions putting aside this bad blood and working together. But, you know, as Alec said, if they can do that, then there is a lot potential for things to go right.

Gideon Rachman
So, Alec, to conclude, I mean, a lot of people, including Ramaphosa, who deliberately evoke these memories are looking back to 1994, when the transition from apartheid to the rainbow nation and seeing this is almost a re-founding of South Africa. And I guess one of the things we learned back then is that there were always big fears about the country potentially tipping over the edge. Back then, there were people talking about civil war. Do you think, you know, South Africa’s never gonna totally shake free the fear that it might slip into civil violence or that it could become another Zimbabwe, but that actually these two weeks of the election and the aftermath have done quite a lot to restore confidence in the fundamental resilience of the country?

Alec Hogg
Gideon, the kind of two big things that would suggest that South Africa’s not going a Zimbabwe route, first of all, we have got many different groupings in this country. It’s a big country. It’s made up of lots of different minorities in many ways, even though it’s painted as black and white. It’s not like that at all. In KwaZulu-Natal, and you did reference this earlier, in July 2021 Zuma had a go. There were riots in KwaZulu-Natal. Everyone was caught by surprise. But most of all, those who instigated the riots were caught by surprise at the way that the middle class actually stood up to it and quelled the riots. Today, that’s not an option for Zuma any more because people are prepared. So although there will be a lot of talk and there will be a lot of concerns, that’s pretty much likely to be overblown because this time around they don’t have the element of surprise, and they’ve already been shown that sedition in that regard doesn’t work. That’s one good thing.

And the second good thing: remember the Democratic Alliance is a liberal party. It’s not a conservative party. It’s very much a liberal party. In a South African context, because of race being brought into it for political reasons, it’s painted as a centre-right. It’s actually much more centre-left in a global context. But where they are conservative or where they are focused is on the finances of this country, and it desperately needs it. South Africa has been running big deficits now for 15 years, with most of the tax being spent and then some on consumption expenditure, so very little going into infrastructure. So it shows you how parlous the state of the South African finances are and how it needs control. Now you’ve got a finance minister who understands this. You’ve got a president who understands this. You did have a period back in 2007, 2008, when the country ran a budget surplus overall. So that’s gonna be a starting point, which is going to stabilise the economy, which is going to get things going again and is going to pull in investment.

Remember, as a developing country, we desperately need foreign capital, and that’s been absent for 15 years. When the rest of the world sees that South Africa is attacking its primary issues, and when the rest of the world sees the vast, everyone knows there’s vast potential in South Africa, no question about that. But when they see that there’s a sensible approach towards the economy, that would presumably open the gates and lead for a much-improved country and a much-improved future for the ANC, which has been on the slide, and for the country as a whole.

So, yes, 1994 we were the start of a democracy. We’re a young democracy. We’ve learned some very, very hard lessons in the last 30 years. Those lessons are now being applied by the majority of the people. And I think, as Monica said earlier, 68 per cent of parliament, more than the two-thirds majority required to change the constitution, are now in one camp. And that’s a very good thing.

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Gideon Rachman
That was Alec Hogg ending this edition of The Rachman Review. You also heard from my colleague Monica Mark in Johannesburg. That’s it for this week. Thanks so much for joining us. And please join me again next week for another edition of The Rachman Review.