The South African elections that took place on 08 May 2019 were landmark in many ways. They were the elections that saw significant speculation around the rise of the EFF and the Julius Malema dialogue, questions around the ability of the ANC to root out corruption and start afresh, and the DA’s lurching inability to build a stable campaign.
Every one of the leading political parties had faced significant stumbling blocks over the past few years, their foundations torn by scandal and corruption.
In the wake of the ineptitude and casual disregard for the country lay the business community, holding up the economy and the livelihood of the people. The elections were not just about the social inequalities and injustices that pepper the decision-making of the past, they were about changing the perspectives of businesses and foreign investment.
“We are coming off a period of low business confidence in South Africa and there is a lot of frustration around inconsistent government policies and regulations,” says Miles Crisp, CEO, Tarsus Technology Group.
“Throughout the election period, the business sector has been looking for consistency and certainty around regulation and policy. There has been this layer of uncertainty that has not just affected business confidence but foreign investment as well.”
A shaken business sector
International investment has gone elsewhere, looking to place funds in countries that aren’t wavering back and forth on critical issues and that have clear systems in place. It’s an understandable move but it is one that has shaken the business sector in South Africa.
“The IT industry has adopted a ‘wait-and-see’ approach,” says Crisp. “Many organisations have been sweating their assets, waiting on the results of the elections before replacing their technology or expanding their investment. This has led to no growth in the industry as a whole.”
That said; however, the elections have been the linchpin around which much of this confidence has pivoted with many considering them the start of a new era in business growth and success. There has been a lot of noise and debate. Who will win? How much ground will the EFF’s slick campaign gain? Will the ANC get the majority it needs to avoid a coalition and emerge strong enough to root out the corruption at its core?
“The business community has been hoping for a reasonably strong ANC win that will allow for them to govern without a coalition as this would significantly hamper decision making and change,” says Crisp. “Nobody has been able to ignore the impact of national outcomes and what changes in political party base would mean for the provinces. Gauteng, for example produces 40% of the country’s gross domestic product (GDP) and is a weak spot for the ANC.”
The EFF was predicted to gain notable ground in Gauteng. A concern for many companies, as the EFF dialogue is one that doesn’t necessarily inspire confidence. The DA has also not gained much ground in the province, although its presence in the Western Cape remains strong, and the wavering loyalties in the province have left many concerned that a watery coalition will emerge.
“The fear that you can see in the business community is that any form of coalition, such as ANC and EFF, will just drive the government further away from certainty and stability,” says Crisp. “There would be delays around regulation and land claims that would fundamentally impact on business growth and the economy.”
A comfortable majority
Of course, a comfortable ANC majority theoretically means that the ANC under Cyril Ramaphosa would have the ability to redesign cabinet and remove corruption.
The organisation conversation is simple: what kind of cabinet will be appointed and what consequences will be imposed on those who have been implicated in corruption? Will better-qualified individuals man the helm, or will the ANC continue to make the same mistakes, constantly tripping up the country with its clumsy attempts to walk into a more robust future?
“It has been a frustrating ‘wait-and-see’ that has been further affected by the strength of the Rand,” says Crisp. “The currency has been a lot more volatile than usual. Donald Trump makes noises and the dollar spins up or down; that then exacerbates the volatility of the Rand which then hits the business right between the eyes. We have had to get used to extremely volatile currency movements, becoming smarter about how we buy and pay and carry foreign creditors. Every time the Rand spikes in terms of weakness, people withdraw.”
The opportunity to ignite real change
It has been a difficult environment for business, and it is hoped that the elections will help wipe the slate as clean as it can be, providing both country and government with the opportunity to ignite real change.
What lies ahead over the next few years is anyone’s guess, but the hope is that it involves plenty of consistency in regulation and legislation so that business can grow, foreign investment can thrive, and people can settle down into some kind of stable normalcy.
“One thing that must change in the future is how loudly businesses shout for change,” concludes Crisp. “The voices must get louder. Industries have to stand up and be heard. It is critical that we stand for the change that the business community needs.”