South Africa has gone to the polls. Although only a quarter of the votes have been counted this morning, and the official final result is not expected until next Saturday, it is already becoming apparent that the ruling African National Congress (ANC) and its President Ramaphosa have gained a clear absolute majority in the National Assembly, after pooling around 55% of the votes so far. Compared with the parliamentary elections five years earlier, the ruling party will have lost votes as things stand at present. But compared with the result of the 2016 local elections, the share should remain more or less unchanged. It is also important to note that the ruling party enjoys greater support in rural areas and that counting tends to take longer here. Based on these considerations, the ANC would have a good chance of chalking up a result of between 55% and 60%.
For President Ramaphosa, reaching or exceeding the threshold of 55% of the votes at national level is of particular importance for his position within his own party. Here he faces the political cronies of former President Zuma who has inflicted serious damage on the country through mismanagement and corruption. During the election campaign, Ramaphosa had not only made it clear that he wanted full investigations to be held into the ANC’s wrongdoings of past years, but has also taken up the cause of initiating ambitious structural reforms to revitalize the country’s economy and create jobs. The economic challenges facing Ramaphosa are anything but small. The growth momentum of around 1.5% (y/y) expected for the current year is unlikely to suffice to combat the high level of unemployment to any reasonable extent. Other important tasks are solving the problem of the recurrent power cuts in the country and keeping social tensions in check. In view of these challenges, it is all the more important for Ramaphosa to visibly strengthen his position within the ANC. If he succeeds, the currency should also benefit significantly from the election result.