Economic Impact of ANC Election Victory

　　On May 7， South Africans went to the polls in throngs to exercise their constitutional right to vote. Ina country where the majority of the population wasonce excluded from casting their votes and fromparticipating in the political decision making process，elections are an integral part of democracy forlarge parts of society.

　　Twenty years into South Africa’s hard-fought-fordemocracy， the country continues to strugglewith overcoming the legacy of apartheid，and achieving the required economic growthnecessary to boost employment and reducepoverty and inequality. While the country hasmade great strides in increasing the numberof people with access to basic services such aselectricity and sanitation， too many people stilldepend on social grants to get by. For many，this is not enough， and disenfranchised communitiesregularly air their frustration through often violentservice delivery protests.

　　In traditional feisty electioneering campaigning，each party contesting for votes was quickto promise jobs， better services and a betterlife. Most analysts and economists， and evento some extent the political parties themselves，seem to agree that the government alone isnot able to provide jobs. That task requiresa concerted effort of the nation. Jobs didhowever emerge as the key selling point tothe electorate.

　　Expected victory

　　As expected， the African National Congress(ANC) - the ruling party since 1994 - was victorious atthe polls with 62.15 percent of the votes， followed by theofficial opposition Democratic Alliance (DA) which won22.23 percent of the votes. This is a slight decline for theANC， which secured 65.9 percent in the 2009 elections. InGauteng Province， South Africa’s economic heartland， thedecline of the ruling party was even more pronounced；here the ANC declined from 64 percent to under 55percent.

　　While the outcome of the election and the victory ofthe ANC did not come as a surprise， a number of politicalcommentators are viewing the slight weakening of theANC support as an indication of the populous being disappointedby the economic performance of the country andthe service delivery of the national government. Againstthis backdrop， the question of whether the ANC is likelyto change its economic policy path is often put forward.The answer to this question is most likely no. Few expect amajor change in the economic policy direction of the ANC.

　　And to be honest， why would they？ Winning with such aconvincing margin provides any party with little or no incentivesto distract from its current economic policy path.

　　National Development Plan

　　Indeed， it could be considered that a major positive of theANC retaining its place is the stability it brings to economicplanning through the National Development Plan (NDP)- the growth plan which was devised and adopted by theruling party in 2010. It provides a blueprint for the country’seconomic growth over the next 20 years， encouragingincreased private sector investment in infrastructureprojects， with the energy sector - where capacity deficitshave hamstrung the economy since 2008 - set to derivethe greatest benefit.

　　Specifically， it advocates that 10 percent of GDP is to bespent on infrastructure investment， including improvementsto power generation and supply， public transportand telecommunications.

　　However， while the ANC is in a comfortable situation interms of support by the majority of the voting public， theruling party has come under increased pressure from theirtraditional allies for supporting this plan. This pressure hasbeen applied from the quarters of the Congress of SouthAfrican Trade Unions (COSATU) affiliates.

　　The South African Municipal Workers Union， the Food& Alliance Workers Union and， most vocally， the NationalUnion of Metal Workers of South African (NUMSA) havedenounced the plan - the latter， having stated it is basedon DA policies and “neoliberalism.”

　　However， it is exactly for the reason of the ANCgovernment’s close alliance with the trade unions thatthe country’s economic growth has deteriorated. Havingproduced a rigid labor system - one of the banes to foreigninvestors operating in the country - South Africa has seensignificant losses in foreign direct investment (FDI)， provingthe system to be one of the biggest inhibitors to promotinglong-term economic growth.

　　It is expected that the government will throw its fullweight behind the NDP.

　　Beyond this， the government also needs to ensure thatit resolves the four-month-old platinum sector strike. Overthe short term， an upward movement in strike action canbe expected and may continue due to the labor turbulencesfrom events such as the violent wildcat strike bymine workers in August 2012 at Marikana， Lonmin mine，which left 44 people dead and scores injured.

　　If the government fails to address South Africa’s keychallenges of poverty， unemployment and inequality- sometimes dubbed the “unholy trinity” - the ANC is runningthe risk of losing further support by an increasinglyimpatient electorate when South Africans go back to thepolls in 2019.