South Africa Takes To The Polls
It’s election day in South Africa, and although analysts are confident of yet another ANC victory, it’s the margin that has them worried. But what’s the fuss about?
This, the sixth set of democratic elections since the end of apartheid in 1994, will likely be one of the toughest for the African National Congress’ traditional grip on power. Years of corrupt rule and spiralling unemployment under president Jacob Zuma has seen support for the party slipping while smaller, more radical parties, such as the Economic Freedom Fighters (EFF) absorb defecting voters.
Although reformist ANC leader, Cyrill Ramaphosa, has been well received by the South African population, he still has his work cut out for him to undo the damage done by Zuma. Investors will be watching the margin of victory in key provinces, such as the Western Cape and Gauteng closely to see how much ground the ANC loses to its two main competitors, The Democratic Alliance (DA) and EFF.
A smaller winning margin for the ANC will allow opposition parties to interfere with the policy implementation process, and potentially hamper growth and development. A larger presence for the EFF, which advocates land expropriation without compensation and the nationalisation of banks, mines and just about anything they can get their hands on would have a very disruptive effect on the country.
The benchmark Top 40 index has significantly underperformed its emerging market counterparts, rising a mere 10.9% since the start of 2019. However, a positive result today could help relieve some pressure on markets for a stronger second quarter. Let’s see what comes out in the wash!
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