In my opinion, South Africa’s 2009 parliamentary elections have been an extraordinary event in many respects. Perhaps most importantly, the ruling African National Congress (ANC) scored a decisive electoral victory, gaining 65.9% of all votes, with the Democratic Alliance (DA) and the Congress of the People (COPE) clearly trailing behind at 16.7% and 7.4%, respectively. While this represented one of its weakest results in years, I have to cut the ANC some slack: weakened by the formation of the rival COPE and Jacob Zuma’s credibility battered by allegations of corruption, many expected the ANC to fare significantly worse. As such, the result constitutes a vote of confidence and gives the party a strong mandate to rule the country over the coming five years.

At the same time, the fact that the ANC did not manage to regain its two-thirds majority represents an important victory for South Africa’s opposition parties. Especially for the DA, it symbolises in some ways the demise of the ANC’s all-powerful position in the political arena and highlights the growing strength of South Africa’s largest opposition party. Indeed, on a national level, the DA was able to extend its share of parliamentary seats to 67 (16.6%) from 50 (12.4%) in the previous 2004 elections, underscoring the party’s upside momentum in national politics. Furthermore, for the first time since the end of apartheid, the DA managed to score an outright majority in the Western Cape. Although DA leader Helen Zille still has to announce her plans for a potential coalition with other parties, the ANC might not have any control at all in the running of one of the country’s most important provinces.

In a similar fashion, while some commentators expected more, the COPE’s 7.4% share of the votes clearly demonstrates that the party is able to survive as a political entity. With electoral funds extremely low and only months to formulate an effective campaign strategy, the COPE faced an immense uphill struggle from the start, and its relatively modest electoral result did not come as a major surprise. As the party has more time to strengthen its support base and establish itself as a viable political force across the country, the potential for the COPE to pose a more serious challenge to the ANC in the next elections is considerable, in my view.

ANC Still In The Driver’s Seat
While the ANC may have lost its two-thirds majority and individual opposition parties registered noticeable gains, I believe the ANC will not experience any serious threats to its powerbase and will remain in full control of the policy-making process over the coming legislative period. As I suggested last week, the ANC’s failure to regain its two-thirds majority is more of symbolic value rather than of practical importance. Unless the ruling party intends to make unilateral changes to the constitution (as far as I know it has never done so), a simple majority is likely to be sufficient to push its ordinary policy agenda through parliament.

Although I do not expect drastic changes to South Africa’s policy environment, I do believe however that Zuma, who is widely expected to be South Africa’s next national president, will face an enormous task handling different expectations from the investor community and the country’s left-wing factions. While the ANC is by no means a slave to the country’s trade unions and the communist party, their influence on the policy agenda will undoubtedly be felt over the coming years. Furthermore, Zuma will have no choice but to respond to demands from the country’s poorer social classes, for whom he promised to ease the current economic pain and fight poverty and crime.

All eyes will be on the new cabinet, which will be sworn in on May 9, and for now, the ongoing presence of Finance Minister Trevor Manuel has assured the investor community that there will be no significant changes to South Africa’s market-friendly policies. That said, Manuel’s current allegiance to the ANC (and vice versa) is by no means unshakable, and the risks of a political fallout and concomitant shifts in policy direction cannot be entirely discounted.