South Africa’s ruling ANC loses majority in country’s most sweeping political shift in 30 years

The result marks a meteoric fall for ANC from the 57.5% wrested during the previous election of 2019 — at the time, the party’s weakest feat since South Africa’s first democratic vote in 1994. Long regarded as a symbol of liberation, the ANC has been on the backfoot in a battle with the practicalities of governance in recent years, amid a rise in systemic issues such as declining living standards, chronic power outages, decades-high violent crime rates and unemployment of almost 33%. In 2022, the World Bank named South Africa “the most unequal country in the world.”

“Top-of-mind issues for voters are unemployment, loadshedding, corruption, and crime, which have all taken a toll on the country’s growth performance for years,” analysts at Deloitte said at the start of the month.

Unlike the party’s hero Nelson Mandela, who freely formed a power-sharing coalition to bridge distrust with rival parties in the fledgling years of South Africa’s democracy, the ANC’s incumbent leader Cyril Ramaphosa, 71, will have to negotiate a coalition to retain dominance — kickstarting a stretch of talks and uncertainty over the country’s political direction.

Investors will be watching how this changes the course for South Africa’s economic growth, pegged at 0.9% this year by the International Monetary Fund.

Inflation persists stickily at 5.2% in the latest May reading, above the South African central bank’s objective of 4.5%, where Governor Lesetja Kganyago says the print will stabilize in the second quarter of next year. The bank on Thursday held its main interest rate at 8.25%.