GNU’s first 100 days: The good, the bad and the ugly
It has been just over 100 days since the formation of the broad-based co-governing agreement called the ‘Government of National Unity (GNU).’
Taking stock of the seventh administration, various analysts and industry experts have described the tenure so far as showing both notable successes and some growing pains.
Business Leadership South Africa (BLSA) CEO Busiswe Mavuso thinks that the report card is “broadly positive,” because the “relationship between business and government has seen marked improvement with the GNU.”
To date, the rand is 7.5% stronger, recently hitting a 20-month high, the bond market is 11% stronger, and the JSE’s main index is up over 10%.
Chief economist at the Efficient Group, Dawie Roodt, said that there has been an “investor relief rally that we see in the financial markets” – evident through improved performance by both equity and capital markets.
Cumesh Moodliar, CEO of Investec South Africa said that “we are in a significantly better space,” adding that with the current coalition configuration, the country has a chance to become “more economically inclusive and potentially better placed to seize some of the opportunities.”
This was recently echoed by President Cyril Ramaphosa, who said that “the advent of the Government of National Unity has renewed investor optimism in the South African economy.”
This optimism is, however, not new.
When Ramaphosa took office in 2018, he rode a wave of investor enthusiasm dubbed “Ramaphoria.”
However, some analysts say that he moved too slowly toward economic reforms and tackling corruption — growth stagnated, businesses limited investment, crime worsened, and infrastructure deteriorated.
Having said that, some business leaders expect this to be different this time as the coalition government could perform better because of increased competition, and a chastened ANC will need success to bolster waning support.
“The fear of failure is going to be an important asset for us as South Africans because we are going to benefit from politicians who want to get things done so they can go back and say, ‘we made the right decisions, you can trust us,’” said Khulekani Mathe, the incoming CEO of Business Unity South Africa.
“It’s providing this enormous opportunity for the country to really pull itself up,” added Mathe.
Some friction and concerns
While there have been notable strides, there have also been notable growing pains.
“Understandably, many have been concerned about the sustainability of the GNU, given the experience of unstable coalitions we’ve had (and continue to have) at local government level,” said Mavuso.
There have been various public frictions between coalition partners on various government policies – notably that of the National Health Insurance (NHI) and the Basic Education Laws Amendment (BELA) Act.
Additionally, frictions between the two largest parties in the GNU, the ANC and DA, in the economic powerhouse of Gauteng have caused riffs.
Most recently, the ANC tabled a motion which led to the ousting of DA Tshwane mayor Cilliers Brink.
Political and economic analyst Frans Cronje said Brink’s ousting is a victory for the anti-GNU faction in the ANC.
He explained that the ANC faction, which supports Ramaphosa, struck the GNU deal with the DA.
However, Cronje said that there are dissidents in the ANC who oppose the GNU deal and would prefer a deal with Julius Malema’s EFF and Jacob Zuma’s MK.
“A nucleus of these dissidents exists in Gauteng, and they worked closely with ActionSA and Herman Mashaba to bring about the motion of no confidence in Brink,” he said.
“That is extremely important. It is a little crack in the Government of National Unity,” Cronje told Biznews.
He added that this crack could run until December 2027, when the ANC selects its new leaders at its national conference where they could select a leader who would collapse the ANC-DA deal, which forms the foundation of the GNU.
Such a scenario could result in a deal between the ANC, MK and EFF.
“This means that a crack has opened, which could become a chasm that could signal the end of the GNU after 2027,” he said.
He added that the dissident faction has already kept the DA out of Johannesburg, which means they should be taken seriously.
This was echoed by Roodt, who said that “Ramaphosa is crucially important for the survival of this coalition, because if he is not there the second layer of leaders which could be guys like [ANC Gauteng Chairperson Panyaza] Lesufi and Paul Mashatile would probably prefer to form a coalition with the left.”
“Let’s see how this thing plays out, but Lesufi already seems to be ignoring Ramaphosa’s directives… [and] these developments could result in the collapse of the working arrangement,” said Roodt.
The Gauteng ANC has denied these claims that they are acting separately from national leadership, saying that all decisions made were approved by the national executive of the ANC and claims against this “merely seek to sow discord in the ANC.”
The DA said that if Brink is not reinstated, all negotiations in Gauteng are off.
Going forward
Noting these squabbles, Mavuso said that “it would be highly damaging were the GNU to fall apart, reversing the tentative confidence that has begun to take hold.”
However, she believes that these are just prevalent examples of growing pains.
“So far, when tensions have arisen, they have been dealt with maturely in a way that puts the country first… long may it last,” said Mavuso.
Recently, Ramaphosa hosted a dinner the leaders of the parties met to reflect on how the GNU was working, and there was general agreement it had made a good start.
“They believe the GNU is working well, and everyone is playing a constructive role,” said Ramaphosa.
Ramaphosa said that he is “even more convinced that the GNU is essential for the growth and development of the country [and] convinced that the GNU will not only survive, but that it will thrive.”
“As party leaders, we nevertheless recognise the parties in the GNU represent a range of political and ideological perspectives. There are issues on which we disagree, and there will be times when differences between the parties will become more apparent.”
“South Africans expect the GNU to succeed, and we will not let them down,” concluded the President.
Read: Rand close to breaking R17 to the dollar – but needs a bigger push
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