Panyaza Lesufi was re-elected Gauteng premier last week and it is widely assumed that his cabinet will include a mix of ANC and DA politicians. (Photo by Lefty Shivambu/Gallo Images via Getty Images)
The knock to the ANC during last month’s general elections has forced it to pursue power-sharing agreements — including in the country’s economic engine room, Gauteng.
Although the prospect of political fractures remains, markets have reacted favourably to the ANC’s chosen partnership. The coalition has seen the party joining hands with its old sparring mate, the Democratic Alliance (DA).
The question now is whether this initial optimism will translate into real growth in a province such as Gauteng, which, despite its many advantages, has buckled under governance failures.
Panyaza Lesufi was re-elected Gauteng premier last week and it is widely assumed that his cabinet will include a mix of ANC and DA politicians, a decision that will be informed by unity government agreements.
The ANC suffered a stunning blow in the province, the party’s vote share falling from 50.19% to just 34.76%. The DA won 27.44% of the vote.
The party found itself in a similar predicament in KwaZulu-Natal, the country’s second-biggest economy, where it formed a majority government with the help of the DA, the Inkatha Freedom Party and the National Freedom Party. The province’s new premier, Thami Ntuli, appointed a multi-party cabinet on Tuesday, giving the DA two critical portfolios — finance and public works.
The prospect of political instability is higher in KwaZulu-Natal than it is in Gauteng, said Jakkie Cilliers, founder of the Institute for Security Studies. Gauteng could enjoy greater stability compared with the previous administration, because the ANC receives the DA’s backing to pursue its more centrist policies.
“You have a more centrist economic and development orientation. The ANC has been talking left and walking right and has been conflicted in its policy implementation,” he said.
“They have increasingly been forced to turn to the private sector to try to resolve issues, but philosophically that has been quite difficult for them. With the DA on board, there will be much more willingness to engage with the business community.”
Greater alignment between the government and the private sector appears to be what is buoying markets. Commenting on the ANC’s chosen government of national unity, Investec chief economist Annabel Bishop said the new administration is expected to build on its relationship with business to improve infrastructure.
Gauteng’s economy, which is still bigger than the KwaZulu-Natal’s and the Western Cape’s combined, has been badly hit by crumbling infrastructure.
Ivan Turok, an urban economist and executive director at the Human Sciences Research Council, had this to say about Gauteng’s current state: “Partly linked to this infrastructure decline, a negative business climate has set in there — particularly in Joburg — leading to limited job growth.”
Figures from the Spatial Economic Activity Data project shows that job growth has dropped off in all three Gauteng metros. This fall has been particularly sharp in Johannesburg, which lost 112 000 jobs between 2020 and 2022.
After infrastructure, poor governance was one of the biggest impediments to Gauteng’s growth, Turok said.
The Gauteng government has struggled to shake allegations of rampant corruption, particularly in its health and education departments. Gauteng has the highest prevalence of reported corruption among the nine provinces, according to Corruption Watch.
Turok said a multi-party government could inspire greater accountability in the province, citing the recent removal of Nkululeko Dunga as Ekurhuleni’s member of the mayoral committee for finance.
Dunga — a member of the Economic Freedom Fighters, which co-governs with the ANC in Ekurhuleni — was in charge of the metro’s finances, which have been on a downward slide under his watch. His axing has given weight to speculation that the ANC will end its working relationship with the Red Berets in Gauteng’s hung municipalities as the party’s government of national unity agreement takes effect.
“If you change the political appointments in key departments, that could have quite a positive effect — setting the right signal,” Turok said.
“That has been a problem in the country as a whole. There has been uncertainty about the leadership. If you send the right signals from the top, you could send the right messages: ‘We are not going to tolerate corruption and incompetence.’ Fingers crossed that could change sentiment and we could start to turn a corner.”