And the profound implications it has for the economy and investors.
Voter turnout plummeted in the 2024 national and provincial elections on 29 May – at 58.64% of the total 27.8 million registered voters versus 65.99% in 2019, likely reflecting the general disillusionment and disengagement of the South African populace with the country’s electoral process and political leadership.
The most significant development was the ANC losing its parliamentary majority for the first time in democratic history – going from 57.6% in 2019 to 40.2% of the vote in 2024.
This seismic shift in SA politics has profound implications for the economy and investors. The emergence of former president Jacob Zuma’s new uMkhonto weSizwe Party (MKP) decimated the ANC’s traditional voter base in KwaZulu-Natal (KZN) and eroded its support in Gauteng and Mpumalanga.
The outcome of the elections has seen two weeks of non-stop negotiations to form complex, multi-faceted national coalitions to govern SA for the next five years. On 17 June, the intention to create a government of national unity (GNU) was announced.
Marriage of convenience
To surpass the 50% vote and form a government, the ANC has been forced to partner with other parties in a marriage of convenience, potentially impacting the country’s economic policies for the better.
Initially, five parties signed the statement of intent to participate in the GNU – including the ANC, the Democratic Alliance (DA), the Inkatha Freedom Party (IFP), Good, and the Patriotic Alliance (PA). Collectively this grouping represented 273 seats in the National Assembly or 68% of total seats, rendering EFF leader Julius Malema’s mooted pre-election role as kingmaker irrelevant.
However, the ANC invited other parties to join the GNU and said discussions “were ongoing.” In a press release on 22 June, the ANC announced that 10 political parties had now signed the GNU statement of intent – with the late joiners including the Freedom Front Plus (FF Plus), the United Democratic Movement (UDM), Rise Mansi, and Al Jama-ah.
Parties that sign the GNU are bound by the foundational principles outlined in its statement of intent and must work together to pursue the GNU’s objectives.
Malema’s EFF is the official opposition in three provinces and the fourth-largest party nationally (9.52% of the vote).
Still, the EFF’s performance was disappointing relative to what some pollsters (and the party itself) had forecast, but it refused to join the GNU because of the DA and the FF Plus’s participation.
The ANC also lost its majority in the KZN, Gauteng and Northern Cape provincial legislatures. Consequently, it had to seek coalition partnerships in these three provincial legislatures.
Having locked in the DA and IFP in a GNU, the ANC, supported by these two parties, took KZN from the MKP, with the leader of the IFP sworn in as premier of the province.
The FF Plus has agreed to partner with the ANC in the Northern Cape and support its candidate for premier in exchange for recognition of the white Afrikaner settlement Orania.
On 30 June, President Cyril Ramaphosa finally announced his cabinet and deputy minister appointments.
In this note, we look at how the balance of power has shifted in each of SA’s provinces, highlight the National Assembly seats those parties contesting the 2024 elections won, and discuss the individuals and parties that will make up Ramaphosa’s cabinet and govern SA for the next five years.
Parties represented in the National Assembly (total votes cast and seats)
How did other parties perform in the elections?
While the ANC performed dismally in the 2024 elections, falling to 40.2% of the national vote, Zuma’s MKP devoured a large chunk of its voter base to become the third-biggest political party in the country.
With an impressive 14.6% of the national vote, MKP booted Malema’s EFF from its position as the country’s third-biggest party (down from 10.8% nationally in 2019 to 9.52% in 2024).
Which parties triumphed in the provinces?
The ANC was the leading party in six of SA’s nine provinces.
The DA managed an outright majority (53.1%) in the Western Cape, while the MKP received the most votes (45.9%) in KZN.
There was no outright winner in the Northern Cape. The chart below highlights the provincial legislature seats of each party in the nine provinces (the provinces are shown in order of the total number of votes cast).
Total votes cast in each province and voter turnout
Gauteng
SA’s economic hub was the most closely contested province, with the ANC losing its majority with 36.47% of the total vote versus 53.2% in 2019. The DA followed it at 26.65% (from 24.53% in 2019) and the EFF at 12.46% (versus 13.53 in 2019). Nearly 4 million people voted in Gauteng, making it the largest voting bloc in the country.
Votes and seats in the Gauteng Provincial Legislature by the 12 biggest parties
KwaZulu-Natal
KZN is the second-biggest province in total votes cast – 3.5 million people voted.
KZN has entered an era of coalition politics; with no party receiving an outright majority, a government of provincial unity (GPU) was formed under an ANC, DA, IFP and National Freedom Party coalition.
Still, Zuma’s MKP recorded impressive voter support in KZN, emerging as the largest party (45.35% of the vote), with the IFP coming second (18.07% versus 14.58% in 2019).
The ANC saw its most significant drop in KZN (to third place) as its support plummeted from 55.47% in 2019 to 17.62% in 2024.
Votes and seats in the KZN Provincial Legislature by the 12 biggest parties
Western Cape
The DA held onto its outright majority in the Western Cape vote, with its support up slightly from 52.41% in 2019 to 53.05%.
The ANC’s support in the Western Cape declined, dropping to 21.34% from 31.23% in 2019, but it maintained its position as the official opposition in the provincial legislature.
The PA increased its support from 0.03% in 2019 to 7.33%, bumping the EFF (5.88%) to fourth place and becoming the third-largest party in that province.
Votes and seats in the Western Cape Provincial Legislature by the 12 biggest parties
Eastern Cape
The ANC maintained its hold on the Eastern Cape, with 62.47% of the provincial vote (versus 69.26% in 2019), followed by the DA, which received 14.62% and held its position as the official opposition.
The EFF, UDM, and the PA all increased their share of the provincial vote.
Votes and seats in the Eastern Cape Provincial Legislature for the 12 biggest parties
Limpopo
The ANC was also victorious in Limpopo, with 74.23% of the vote (although it was down slightly from the 77% it reached in 2019).
The EFF was second with 12.97% (Limpopo is Malema’s home province), maintaining its position as the official opposition.
The DA was up slightly to 6.08% of the total vote.
Votes and seats in Limpopo Provincial Legislature for the 12 biggest parties
Mpumalanga
The ANC holds a majority of 51.89% in Mpumalanga – down significantly from its 2019 percentage of 72.23%.
The MKP was in second place with 17.24% of the vote, making it the official opposition.
The EFF came third with 12.71% of the vote versus 11.51% in 2019.
The DA’s support also increased – from 9.12% in 2019 to 11.84% in 2024.
Votes and seats in Mpumalanga Provincial Legislature for the 12 biggest parties
North West
The ANC maintained its outright majority in North West province, with 58.53% of the vote, but its performance was down from 63.69% in 2019.
The official opposition in the province, the EFF, also recorded a dip in support with a 16.4% share of the vote, versus 17.09% in 2019.
The DA was third, with 13.48% from 11.31% in 2019.
Votes and seats in North West Provincial Legislature for the 12 biggest parties
Free State
The ANC held onto its majority in the Free State, at 52.88%. This is however a double-digit decrease from 2019, when it received 62.94% of the vote.
The DA grew from 17.05% in 2019 to 21.31% in 2024.
The third-largest party, the EFF, posted marginal growth from 11.6% in 2019 to 13.09%.
Votes and seats in the Free State Provincial Legislature for the 12 biggest parties
Northern Cape
This province has also entered an era of coalitions despite the ANC maintaining its status as the largest party; it lost its outright majority, falling just below the 50%-plus-one mark at 49.3% (versus 58.23% in 2019).
The DA received 21.22% (the official opposition) of the vote (down from 24.33% in 2019), followed by the EFF in third spot with 12.89% (up from 9.71% in 2019).
The PA was fourth with 8.36% of the vote versus 0.02% in 2019.
Votes and seats in the Northern Cape Provincial Legislature for the 12 biggest parties
What does the National Assembly look like now?
With the ANC losing its majority – from 62% of the vote in 2014 to 57.6% in 2019 and 40.2% in 2024 – the election was a watershed moment for the country and has ushered in a new era in local politics, an era of coalitions.
There were 400 parliamentary seats up for grabs, with the ANC attaining 159 seats in the National Assembly – down 30.9% or 71 seats from its previous 230.
The top five parties (ANC, DA, MKP, EFF and IFP) together received 360 seats – with the DA and the IFP gaining three seats each and the EFF losing five.
The MKP, which was formed in December 2023, has 58 seats.
The National Assembly now has 18 political parties represented.
The chart below shows the seats in parliament that the top 20 political parties received in the 2019 and 2024 elections.
According to the IEC, this year’s voters roll had 27.8 million registered voters, higher than in 2019 but indicating that more than 13 million citizens of voting age chose not to register for this election. In addition, of the 27.8 million registered voters, only 16.3 million citizens decided to cast their votes.
Votes and seats in the National Assembly of all parties represented, 2019 versus 2024
Sorted according to the largest number of National Assembly seats in 2024 by party.
* Parties formed after 2019 elections.
The GNU cabinet
Ramaphosa announced his new cabinet and deputy ministers on Sunday evening (30 June), two weeks after his re-election as president.
The much-delayed announcement came after weeks of tense negotiations between the ANC and the DA, and, to a much lesser extent, the other eight parties joining the GNU.
Balancing the interests of the ANC and maintaining the stability of the GNU was always going to be a delicate task.
The cabinet increased slightly from 30 to 32 ministers to include GNU members, and the number of deputy ministers has risen from 36 to 43.
On taking office in 2018 Ramaphosa promised to reduce the size of his cabinet, but the current political climate has made this challenging.
The executive now consists of the president, the deputy president, 32 ministers and 43 deputy ministers – with seven parties represented.
In terms of party representation:
- The ANC has 20 ministers and 33 deputy ministers;
- The DA has six ministers and six deputy ministers;
- The IFP has two ministers and two deputy ministers;
- The Freedom Front Plus, Pan Africanist Congress of Azania (PAC), Good, and the Patriotic Alliance each have one minister; and
- The United Democratic Movement and Al Jama-ah each have one deputy minister.
South Africa’s cabinet is one of the biggest in the world relative to its population, and its executive is among the largest globally.
Even the UK, which boasts one of the largest cabinets in the developed world with 31 ministers, has a smaller executive despite having around 7 million more people than SA.
Germany, Europe’s largest economy, has a population of over 83 million (20 million more people than SA) and a cabinet consisting of just 16 federal ministers and the country’s chancellor.
SA’s new cabinet
For the formation of the new cabinet to be made possible, the president announced a reconfiguration of several ministries.
The former Ministry of Agriculture, Land Reform and Rural Development has been split into two separate ministries, a logical move given the incoherent and misaligned policy that stemmed from the previous ministry as a function of its given structure.
The ministries of Higher Education, Science and Technology and Justice and Correctional Services have also been divided.
The role of the Ministry in the Presidency responsible for Electricity has been expanded slightly to include the broader energy portfolio, while Mineral and Petroleum Resources remain separate.
The Department of Public Enterprises has been dissolved, with its functions temporarily moving to the Presidency while a new shareholder model is developed.
In the economic cluster, ministers Enoch Godongwana and Gwede Mantashe return to their Finance and Mineral and Petroleum Resources portfolios respectively, with other functions within the cluster being reconfigured.
With the cabinet in place, the next significant challenge for the GNU is to establish a unified policy agenda and programme of action.
The president has called for a national dialogue to facilitate this, providing a platform for all parties and other societal stakeholders to discuss the country’s challenges. The president is scheduled to deliver his Opening of Parliament address on Thursday, 18 July, when he will outline the new administration’s policy priorities.
While it is still too early to draw any feasible conclusions around the effectiveness and efficiency of this new cabinet, as it stands, the executive is now in a far stronger position to guide the country’s much-desired (and needed) reform course in key areas than it has been in many years.
At the time of writing, the new cabinet, on balance, has been viewed positively by financial markets. Bond investors have been particularly encouraged by the continuity in Finance, which remains committed to fiscal consolidation. The addition of a deputy minister is also viewed as supportive.
The portfolios focused on priority areas for the policy reform agenda have seen several improvements and strong appointments, further bolstering our optimism regarding the positive impact of policy reforms supported by Operation Vulindlela, the policy implementation unit of The Presidency and National Treasury.
Despite the complex and protracted nature of structural reforms, this continuity and focus on critical areas strengthens our confidence in the ongoing reform efforts.
The election outcome and GNU are steering South African politics toward the centre.
The radical economic transformation faction will be positioned to the left (or far right, depending on your perspective), libertarians to the right, and a pragmatic centre will advocate for social-democratic policies.
This marks the most significant political realignment since 1994.
Nonetheless, this new cabinet is by no means a ‘silver bullet’ for the domestic economy – the road ahead will be difficult, fraught with the usual politicking and disagreement among the various members of the GNU.
Up until the announcement of the new cabinet, investors had become increasingly concerned about the GNU potentially collapsing at its first major challenge. This in turn unfortunately damaged confidence in the GNU itself and in its ability to positively influence SA’s economic and political direction. This moderation or correction in sentiment (think Ramaphoria 2.0) was necessary in some measure. Market sentiment now better reflects the complexities and risks inherent in SA’s evolving, dynamic coalition landscape.
What can investors expect?
With the GNU and his cabinet announcement, Ramaphosa’s ‘repair’ scenario should maintain momentum.
The president will likely be encouraged to steer ahead unfettered with his anti-corruption and growth agenda, hopefully at a faster pace than during his first term. A GNU that works should, in turn, be positive for the local economy.
We are likely to see more inflows of foreign direct investment and local investment as GNU policies are clarified, especially the more controversial issues of the past that have held the local economy for ransom – those related to expropriation without compensation, nationalisation of the South African Reserve Bank, the National Health Insurance bill (signed into law just before the elections), cadre deployment and so on.
Overall, a more certain future where the balance of power does not rest exclusively with one party should boost JSE-listed equities (bar any external offshore factors) and see the rand strengthening (in June, the rand strengthened by 3.3% against the US dollar).
In terms of exposure to JSE-listed equities, we [Anchor Capital] are overweight SA equities (shorter term). In our view, far more concrete pro-growth reforms are needed to get us to take a longer-term, more bullish view on domestic equities.
We recommend exposure to SA Inc shares, especially quality counters like the SA banks, retailers, and property counters. Nedbank, Absa, FirstRand, Standard Bank, Capitec, Bidvest, Shoprite, Clicks, local industrials and property shares are expected to do well following the election results.
At the same time, more cyclical counters such as Motus, Imperial and Super Group could also rise materially as expectations of economic growth improve.
Conversely, rand-hedge shares are likely to underperform with a strengthening currency.
While we are maintaining meaningful exposure to SA Inc shares, we, as always, recommend that investors retain a diversified investment portfolio. Investors should be ready to react as the current SA political drama unfolds. The country has serious structural issues, and advances in solving these by implementing concrete steps to address these problems will be extremely beneficial for the country.
However, investors should also bear in mind that many factors impacting equity markets are global in nature, and the local political environment is just one of the many contributors.
Although we continue to have a positive stance on local equities, the future is uncertain. Being nimble is as essential as ever. Investors in the SA market have been on a rollercoaster ride for a while now, with worsening domestic economic data and news, and an extremely difficult operating environment for businesses.
Hence, sectoral exposure becomes increasingly important, and these could be materially differentiated over the coming months.
Nevertheless, if successful, a GNU can lead to more certainty for investors (foreign and local) and more definitive policy measures, which are likely to boost SA’s flagging economy and, importantly, create a positive environment for economic growth that the country so desperately needs.
Casey Sprake is a fixed income investment analyst and Marco de Matos a research analyst at Anchor Capital.