With the National Elections around the corner, South African businesses are biding their time. <\/p>\n\n\n\n
According to RMB Chief Economist and Head of Research Isaah Mhlanga, there are four scenarios for next year’s election. <\/p>\n\n\n\n
Firstly, the ANC gets above 50% of the votes and does not need to form a coalition government. <\/p>\n\n\n\n
“Under this scenario, the current policy trajectory \u2013 with reforms in energy, logistics, water and safety and security, among others \u2013 continues at the current slow pace,” Mhlanga said. <\/p>\n\n\n\n
In the second scenario, the ANC gets between 45% and 50% of the vote and can form a coalition with smaller parties – and avoid working with the DA and EFF. <\/p>\n\n\n\n
At panel discussions that included sell-side economists (from investment banks) and the buy-side (portfolio managers) that Mhlanga partook in, experts believed that the second scenario was the most likely. <\/p>\n\n\n\n
In the third outcome, the ruling party joins the EFF in a coalition. <\/p>\n\n\n\n
“This outcome was viewed as holding the potential for a more populist government with a potential slowdown of current reforms. The prevailing view was that markets would sell off if this happens,” Mhlanga noted. <\/p>\n\n\n\n
Lastly, the ANC and DA could join forces to form a coalition. This was seen as the least likely by the experts, despite probably having the best overall outcomes for the ountry. <\/p>\n\n\n\n
Amidst this uncertainty around the 2024 election, businesses are stuck in wait-and-see mode. <\/p>\n\n\n\n