Nine months after South Africa’s broad-based coalition government was formed, the honeymoon period appears to be over, and its future is increasingly uncertain.
Known as the Government of National Unity (GNU), tensions have escalated after coalition partners the Democratic Alliance (DA) and Freedom Front Plus (FF+) voted against the national budget.
They cited their opposition to the proposed one-percentage-point VAT increase, which will take effect over the next two years.
They also criticised the budget for excessive spending, weak fiscal discipline, and a lack of focus on economic growth and job creation.
Despite this, the ANC secured enough support from other GNU members and opposition parties ActionSA and Build One South Africa (BOSA) to pass the fiscal framework.
“You can’t be part of a government whose budget you opposed,” said Presidency spokesperson Vincent Magwenya after the vote.
A day before the budget vote, a leaked recording revealed President Cyril Ramaphosa’s frustration.
“Their choice will have consequences. Rather than us say, ‘We’re kicking you out,’ everyone must see and know, ipso facto, they will have defined themselves out of the GNU,” he said.
“You must not interrupt your adversary as they are making a mistake, and they can see they put themselves into a cul-de-sac,” added Ramaphosa.
The DA responded that they “entered the GNU to rescue South Africa, not to roll out the ANC’s failed policies of the past 30 years.”
They have since taken Finance Minister Enoch Godongwana and SARS Commissioner Edward Kieswetter to court over the VAT hike.
While the DA has reaffirmed its commitment to the GNU, the FF+ said it still supports the idea of a functioning coalition but believes it requires a thorough reassessment.
Business leaders have urged the ANC and DA to resolve their differences, warning that a collapse of the GNU could hurt economic growth and employment.
In response, Ramaphosa said that although government works with business, “what will not happen is for any business to give orders and dictate what should happen, because that space is occupied by people who have been elected.”
The ANC’s national working committee is expected to meet on April 7 to decide whether to retain the current GNU structure or make changes. According to reports in the City Press, the party is considering four options:
Retain the current GNU, which commands 287 out of 400 parliamentary seats;
Form a minority government;
Expand the GNU by bringing in smaller parties like ActionSA and BOSA;
Or negotiate a coalition with the Economic Freedom Fighters (EFF).
The disagreement has highlighted the challenges of coalition governance following the ANC’s drop below 50% in the May 2024 elections, where it secured around 40% of the vote and lost 71 National Assembly seats.
Scenario 1: Minority Government
The ANC, whose National Assembly (NA) representation dropped in the 2024 national elections, has several options if it chooses the hypothetical of giving the DA and FF + the boot.
The first option is that of a minority government, which maintains the current parties as part of the GNU with the exception of the DA and FF +.
This would put them in a weaker and vulnerable position, sporting 194 out of the 400 seats (48.5%) in the NA due to the loss of the DA’s 87 seats and the FF’s 6.
This would not be ideal, as experts say a minority government would likely lead to instability and legislative paralysis.
Without a parliamentary majority, every legislative decision, including critical budgets, would depend on ad-hoc agreements with opposition parties.
However, economist Dawie Roodt said that “a minority government is already priced in the financial market.”
“So if they announced that the the DA is going to leave and the ANC is gonna go as a minority government, I don’t expect much reaction to the financial markets,” said Roodt.
Scenario 2: ANC partners with smaller parties
The second option is to bring in parties that voted for their budgets, including ActionSA and BOSA.
Bringing ActionSA’s six seats into the GNU if DA and FF+ were to leave would bring the GNU’s seat count to 200 (50%) in the NA, and 202 if BOSA were to join too.
Speaking to Newzroom Afrika, ActionSA leader Herman Mashaba said that should Ramaphosa offer ActionSA a place in a GNU without the DA, the party would gladly accept.
“If the ANC so desire, because it’s not our decision, it’s the president’s prerogative to put together the Cabinet. He’s already been elected as the president of the country, so the entire prerogative is with the president to decide on a new Cabinet,” said Mashaba.
“If it does happen that he invites ActionSA to be part of that government, we will gladly participate in ensuring that we keep our country stable,” he added.
This marks a shift from Mashaba’s previous stance, where he firmly rejected any suggestions of joining the GNU or governing with the ANC.
Roodt said that bringing in ActionSA “is basically what we have at the moment, and again, I don’t think a significant reaction by the financial markets [will occur].”
“The markets are far too concerned about what’s happening internationally at the moment,” he added.
Scenario 3: ANC partners with EFF
The next option is that of negotiating with the EFF to join the GNU – a move that factions in the ANC, particularly aligned to the RET movement, have been pushing for.
EFF leader Julius Malema has long made it clear that his party would only join the GNU if the DA and FF + were to leave the coalition.
If the other parties, besides the DA and FF +, were to stay and the EFF joins, that would bring the total seats to 233 (58.25%).
Rumors have been abuzz about the possibility of Jacob Zuma’s uMkhonto WeSizwe (MK) Party adding their 58 seats to the mix.
However, this is seen as unlikely as their negotiations have long demanded the removal of Ramaphosa as ANC president.
Roodt believes that this grouping would draw the attention of markets already preoccupied by major international developments.
“Now the markets are gonna bomb out if that happens. That is gonna be a seriously bad reaction by the financial markets,” said Roodt.
“Again, the financial markets are more interested in what’s going on internationally. But that will exacerbate. An ANC/EFF/ MK ANC coalition is going to make a very, very bad situation much, much worse,” he added.
Prior to the elections, Oxford Economics assessed various coalition scenarios – including that of the ANC and EFF.
It said that the ANC, under pressure from the EFF, could be forced to adopt “more radical leftist policies”, although not as extreme as the EFF would like.
The fiscal deficit would widen, and in foreign policy, relations with international partners like the US could be further strained.
While some like the DA have viewed this as a “doomsday” scenario, Head of Africa Macro at Oxford Economics Africa Jacques Nel forecasted a weaker rand, higher inflation, and a slight decrease in growth.
