As the country prepares for a coalition government, an expert is predicting that the plan to privatise state-owned entities (SOEs) will be terminated.
This comes after the ANC walked away with 40.2%, the left-leaning five-month-old uMkhonto weSizwe party amassed 14.6% and the EFF received 9.5% of the votes in the general elections over the past two weeks.
Though former president Jacob Zuma’s MK Party’s economic policies are unclear, the Julius Malema-led EFF “advocates for the nationalisation of key industries, aiming to ensure equitable access to resources and reduce economic disparities”.
It will also be interesting to see if the ANC’s policy position to nationalise the SA Reserve Bank, resolved in 2017, will come into fruition should the party decide to govern with the EFF and MK.
Since the fifth administration took over in 2019, there have been moves to privatise and unbundle cash-strapped SOEs. These include Eskom and SAA. Labour unions have also accused the outgoing ANC government of attempting to privatise the other two SOEs. These are the ailing Transnet and the SA Post Office.
No clear economic plan
“The options that are coming out now are the government of national unity with the four parties (ANC, DA, MK and EFF). And the convening of economic Convention for Democratic SA. That option would lift everyone’s hopes. Though neither of the four major parties has a clear plan for the economy,” said economist Duma Gqubule,
Gqubule raised concern that the election results brought uncertainty on issues. Mainly on the direction the country would be taking with regards to the economy.
“The general election results have brought so much uncertainty from an economic policy point of view. A coalition on the left is going to see the ANC have to make compromises. This includes the nationalisation of land and mines.
“Probably the restructuring of Eskom has to stop. There is no way the ANC could go into a coalition government with the two left-leaning parties and maintain its current economic policies. Something has to give,” said Gqubule.
He, however, said if the ANC went into a coalition with the DA, it needs to meet the blue party half way. This by compromising on policies like the minimum wage and the broad-based black economic empowerment. Also on the public interest considerations of the competition policy and affirmative action.
“If the ANC goes into coalition with the DA, we will see the privatisation of state-owned entities on steroids,” he said.
Making a prediction on the currency trajectory, Gqubule said a DA alliance would result in the rand being on R17 against the US dollar. It will be R18 should there be a government of national unity. And R20 if there is an EFF and MK alliance.
“These currency movements would be for the short term,” he said.
Gqubule said he was worried if President Cyril Ramaphosa would be the right person to lead a coalition government.
“This is the president who promised a social compact when he came into office five years ago. Which he has not delivered,” he said. How was Ramaphosa expected to deal with challenges relating to a coalition government when he couldn’t deliver a social compact?”
Will of people reflected
The Black Business Council’s chief executive, Kganki Matabane, said there should be a policy to regulate coalitions.
“We’ve long called for a law that will regulate coalitions in order to ensure stability in the country. Both local and international investors are looking for stability and policy certainty.
Matabane added: “The elections reflect the will of the people and democracy in action. As BBC, we will continue to lobby for the speeding up of of the socio-economic transformation to any coalition government.”
Allan Seccombe, the spokesperson for the Minerals Council, said the organisation will work with the government of the day. This to grow the mining industry by encouraging exploration and investment in new mines. The aim will be for the benefit of all South African citizens.
