South Africa’s post-election wrangling leaves investors in limbo
- June 3, 2024
- Infrastructure
- 0 Comments
Investors braced for further upheaval in South Africa’s financial markets in the wake of last week’s elections that produced no outright winner, with the outcome of ongoing coalition talks remaining highly uncertain. The African National Congress fell short of a parliamentary majority for the first time since it took power three decades ago, as its supporters voiced their anger about endemic poverty, unemployment and crime by boycotting the polls or backing its rivals. It won 40.2% of the votes cast on May 29, results released by late Sunday showed. The centrist Democratic Alliance garnered 21.8% support, former President Jacob Zuma’s new uMkhonto weSizwe Party, or MKP, 14.6% and the leftist Economic Freedom Fighters 9.5%. The latter parties both favour increased state spending and the nationalization of mines and the central bank, and the prospects of them joining the government and demanding populist policy changes is weighing on South Africa’s currency and debt. “Investors should be very worried because South Africa is at a fork in the road,” said Anne Frühauf, the managing director of risk adviser Teneo. “Right now, almost any coalition outcome is possible.”
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