Tshwane riots show the result of Zuma’s crony politics in SA

While the market has largely ignored the ANC in-fighting that has spilled onto the streets of Tshwane so far, if the violence and destruction escalates, it could impact South Africa’s economy.

This is according to Nomura’s Peter Attard Montalto, who says that markets are currently more focused on the Brexit vote happening this week than on intra-ANC politics.

However, Attard Montalto warned that if the army is deployed, or if there are more fatalities, investors are going to take note.

More concerning, however, are the longer-terms aspects of what’s going on, he said.

“What (the riots) do highlight, are some of the risks of the transition of power from the ANC to more contested politics with other parties and the contestation for power within the ANC in such an environment.”

“It shows the importance that ‘cadre deployment’ – choosing who will be in charge, have access to patronage networks and tender decisions – is within the ANC and how conflict can develop over this, spilling over into violence. This is what ultimately concerns us,” he said.

The analyst said that the riots paint a bleak picture of what lies ahead for South Africa – especially if the ANC loses major metros to other parties.

“The big long-run bite point for the South Africa narrative is how the ANC has given up power to the opposition, first at a local level, then at metro level, then for other provinces outside the Western Cape and then ultimately nationally.”

“The doom-mongering scenario is that violence breaks out as the ANC tried to prevent the transition of power – that such violence is directed towards the transitioning opposition party taking over power as well as the state and local infrastructure,” Attard Montalto said.

“The more optimistic scenario is that after an election defeat, a party becomes dysfunctional, non-violent infighting occurs, and the outgoing party looks in on itself.”

According to Attard Montalto, the view has always leaned more to the latter, peaceful route: historically the ANC has ceded power peacefully in areas such as the Western Cape.

“However, the draw of power and its effects are clearly being felt now, and the rise of the tenderpreneur faction within the ANC means there is the risk things may be less smooth this time around in the metros.”

Predictions for election results

A recent Ipsos poll showed that the ANC could lose Tshwane and Nelson Mandela Bay to the Democratic Alliance, while keeping control of Johannesburg.

However, Attard Montalto said the poll should be taken with a pinch of salt given the high proportion of ‘don’t knows’; some technical issues there appear to be with demographic weightings (they are likely overestimating youth turnout significantly) and conflicts with party polling evidence.

“We have not yet released an official forecast for the 3 August elections and still hold the view that the formation of opposition administrations, especially in coalition, may be difficult, meaning ANC minority rule is an important scenario to consider,” he said.

“Overall, we think investors may well be surprised with how well the ANC does nationally in these elections.”

More on protest in South Africa

How the SABC is covering the Tshwane protests vs what’s really happening

What the government doesn’t want you to know about violent protests in SA

This is how many protests there are per day in South Africa

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Tshwane riots show the result of Zuma’s crony politics in SA