Ramaphosa puts his party first in GNU

South African President Cyril Ramaphosa is doing largely as he pleases despite his party having lost its parliamentary majority in last year’s elections, raising the ire of other members of the nation’s ruling coalition.

Since the May vote, Ramaphosa has approved legislation that will make it easier for the state to expropriate land, signed off on a law granting the government increased sway over schools policy, and signaled he will press ahead with a yet-to-be-costed national health insurance plan.

Read all our GNU coverage here.

The business-friendly Democratic Alliance, which joined the so-called government of national unity to ensure Ramaphosa’s African National Congress didn’t team up populist rivals, says it wasn’t adequately consulted over the contentious policies, violating the terms of their cooperation agreement.

While the DA has called a formal dispute, it’s stopped short of threatening to withdraw from the 10-party coalition — a move that would cast the country into political turmoil and spook investors.

Rand Vulnerable

“If the DA had to pull out of the GNU, the rand would probably crash within seconds and the DA doesn’t want to take that to its backers,” said Susan Booysen, a politics professor at the University of the Witwatersrand in Johannesburg. “The DA has always claimed to be a rules-based party and so they are easily outmaneuvered, especially by the ANC which believes it has the right to govern.”

The rising tension weighed on local markets on Monday. The rand slumped as much as 1.6%, the most in two months and leading emerging-market declines against the dollar, while the yield on benchmark 2035 government bonds jumped seven basis points.

“Anything that threatens the promising structural narrative in South Africa is not good news,” said Henrik Gullberg, a macro strategist at Coex Partners.

The ANC led the fight against White-minority rule and dominated politics for the first three decades after it ended, but its support slipped to 40% amid public anger over widespread graft, poverty and unemployment. The DA garnered 22% of the vote, and a populist new party founded by former President Jacob Zuma 15%.

Ramaphosa, ignoring the concerns of his coalition partners, said over the weekend his party would forge ahead with implementing its agenda.

The ANC has an obligation to implement policies and decisions that advance the interests of the people “be they related to education, be they related to health, be they related to the issue of land,” he told an ANC meeting in Johannesburg. “These will be taken.”

John Steenhuisen, the DA’s leader and one of six of the party’s members who serve in Ramaphosa’s cabinet, said it “was fanciful and not based on the reality of how government works” for Ramaphosa to expect the new administration to continue where the previous one left off, because the ANC no longer governs on its own.

“This isn’t an ultimatum,” he told reporters in Cape Town on Sunday. “Partners don’t give each other ultimatums. What it is is a mature call for a reset of the relationship.”

Among the DA’s complaints are that the new Expropriation Act is unconstitutional and will undermine property right because it provides for the government to take land without paying for it in specific instances if it is “just and equitable” to do so in the public interest.

It also sees the new education bill eroding the rights of school governing bodies and Afrikaans language speakers, and the new health insurance plan negatively affecting patients’ rights to health care of their choice.

While the ruling coalition’s commitment to making economic growth and job creation its top priorities has boosted business sentiment, there are internal divisions within both the ANC and the DA over its composition, said Daniel Silke, the director of Cape Town-based Political Futures Consultancy.

The DA “hasn’t been able to exert the influence that it would like to have,” but needs to placate its backers and donors, he said. “I don’t think that politically the DA is desperate to be in the GNU, but rather, that the South African business community, in particular, want the GNU to continue.”

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