What can we expect from South Africa’s Government of National Unity?

Analysis

President Cyril Ramaphosa named a Government of National Unity on 30 June after the ruling African National Congress (ANC) was forced to form a government with other parties after losing its majority during the May general elections. Who are the key members of this executive branch, what will be their priorities, and how will this affect South Africa’s business and economic outlook?

About

Leonard Mbulle Nziege is a senior consultant at Concerto, specialising in business and economic intelligence as well as political risk issues in Africa. Contact Leonard at lnm@concerto-pr.com for more information on the subject, or to find out more about how Concerto can help you.

QUICK INSIGHTS

Despite only obtaining 40% of the national vote, the ruling ANC maintained the deputy presidency and control of the most strategic cabinet portfolios
Although opposition parties are well represented in the GNU, they have been largely allocated secondary executive positions
Since the ANC is still the GNU’s largest party, policy continuity will be the order of the day; however, disagreements with opposition parties are likely to emerge.

Ruling ANC maintains a high level of influence despite the establishment of GNU

Negotiations leading to the 30 June announcement of the Government of National Unity (GNU) had been delayed due to new parties adhering to the GNU framework and disagreements between the ruling African National Congress and the largest opposition party, the Democratic Alliance (DA), regarding the allocation of cabinet posts. Ultimately, eight of 11 GNU members were included in the executive, totalling 76 members (32 cabinet ministers and 44 deputy ministers). The ANC was allocated 22 cabinet positions, retaining the deputy presidency and control of the economic and security portfolios: defence, finance, mineral resources, police, trade and investment. It also kept health, higher education, international cooperation and justice central to the ANC’s domestic and foreign policy agenda. President Ramaphosa did not reappoint long-standing cabinet members such as Bheki Cele, Lindiwe Zulu and Thulas Nxesi, while Ebrahim Patel, Naledi Pandor, Nkosanzana-Dlamini Zuma and Pravin Gordhan respectively retired from politics. Nevertheless, President Ramaphosa’s allies, including Angie Motshekga, Senzo Mchunu, Gwede Mantashe, Ronald Lamola and Khumbudzo Ntshaveni, are amongst a handful of cabinet returnees. These individuals will be central to the implementation of President Ramaphosa’s policy agenda, which will be bolstered by his cabinet’s absence of former President Jacob Zuma loyalists.

Opposition parties were mostly given less strategic cabinet positions

The DA was given six cabinet positions, with party leader John Steehuisen given agriculture, while other DA cabinet appointments were primary education, communication, environment and home affairs. The DA had initially requested 12 positions, notably electricity, presidency, trade and investment. The ANC and its alliance partners opposed giving the DA economic portfolios as they feared the party would alter or withdraw ANC transformation policies such as Broad-Based Black Economic Empowerment (BBBEE), which aims to increase black participation in economic activities. However, the DA was accorded to several deputy ministers, including finance, as a compromise. The second largest GNU opposition party, the Inkatha Freedom Party (IFP), was given the cooperative governance and public service ministries. The Freedom Front Plus (FF+), Pan African Congress (PAC) and Patriotic Alliance were each granted a single post namely, correctional services, land reform and sports, arts and culture departments. The United Democratic Movement and Al Jama’ah parties were awarded deputy ministerial positions. These appointments underscore the inclusive nature of the GNU, but also aim to prevent its members from gaining too much influence.

Policy continuity will be pursued, with potential disputes between GNU members

Despite only obtaining 40.6% of votes in the general election, the ANC surprisingly made enough concessions to GNU parties while maintaining a grip on power. This will allow the president Ramaphosa to pursue his incremental reform agenda. The main points of this programme include building state institutional capacity, restructuring state-owned corporations, and improving public service provision. The transfer of the public enterprise’s ministry prerogatives to the office of the presidency and the merging of the energy and electricity portfolios will also streamline the ability to pursue these efforts. They will be complemented by the continuation of Operation Vulindela, an initiative based at the presidency oriented towards business and economic reforms such as improving power generation and facilitating foreign investment. Economic policy will see incumbent finance minister Enoch Godongwana maintaining the application of fiscal consolidation measures. Except for the Al Jama’ah and PAC, GNU members have business-friendly agendas, especially the three leading parties, the ANC, DA and IFP. In this regard, they will propose measures that will stimulate investment, growth, infrastructure development, employment and the protection of property rights. Implementing the National Health Insurance Act (which only four GNU members support), which aims to provide universal healthcare while improving quality and access to education and maintaining the state’s expansive welfare programme, will be priorities for the government’s social agenda. Opposition parties will largely align with these facets; however, concerning the DA, there is a likelihood that disagreements will emerge with the ANC if it attempts to implement party policies rather than decisions taken by the cabinet.