Who’s afraid of Julius Malema? The DA, it seems
The spectre of an ANC-EFF tie-up has been used to forewarn of terrible economic destruction – but none of the other options is damage-free
In typically sensational fashion, Democratic Alliance (DA) leader John Steenhuisen recently had this to say about a possible “doomsday alliance” between the current governing party and the Economic Freedom Fighters (EFF): “If voters sit back and allow the ANC and EFF to take over South Africa, our country will literally be burnt to ashes.”
In the lead-up to the general elections this month, an ANC-EFF coalition has become something of a bogeyman — not least among investors, who consider this the worstcase outcome of the watershed vote.
So big is this threat that the prospect of the ANC slipping below 50% has become somewhat less appealing than it once was, given the possibility that desperation could force the party into the EFF’S embrace rather than towards a too-conservative DA.
If the ANC manages to retain its dominance as a result, the DA’S efforts to cast the alliance in this way will have backfired. It would also expose the shortcomings of the EFF, which has struggled to convince certain voters that it can deliver the left-leaning government many want to see.
In its second post-election scenario report, Oxford Economics delves into the consequences of an ANC-EFF tie-up.
Importantly, this is not the thinktank’s base scenario, which instead sees the ANC taking a less significant knock in the polls and forming a coalition with some of the country’s smaller parties. Oxford Economics outlined this scenario in an earlier report, which also unpacked the effects of the rift created by the struggle for power between Thabo Mbeki and Jacob Zuma in 2007.
“A later schism is more relevant to this scenario: the falling-out between Mr Zuma and Mr [Julius] Malema that midwifed the birth of the EFF,” Oxford Economics writes in its latest report.
Launched in 2013, the Red Berets, as the party came to be known, took aim at Zuma’s presidency, as well as the ANC — which it viewed as having embraced neoliberal economic policies.
A statement on the EFF’S launch made some astute assessments of the South African political economy at the time, accusing the ANC as having made “ideological zigzags” and warning that poverty, unemployment and inequalities would worsen under the party’s leadership.
In an ANC-EFF election scenario, support for the Cyril Ramaphosaled party will have dropped to 40%, as certain polls have predicted. The EFF would see its vote share climb to 18%, making it the best partner in the ANC’S bid to hold onto power.
Under this scenario, Oxford Economics notes, there will be greater hostility towards the private sector. The EFF will push back on progress towards unbundling Eskom and demand that the state creates more public sector jobs through insourcing.
“The most aggressive policy initiatives, like expropriation without compensation or nationalisation of the South African Reserve Bank … are not immediately pursued but may become more important in the future if the government needs a win,” the report adds.
Oxford Economics forecasts that under this scenario the rand could briefly breach R21.50 to the US dollar before trading at R20.10 at the end of 2024 and at R20.50 at end2027. Inflation could also pick up and the fiscal deficit could widen, according to the forecast.
In this scenario, South Africa’s political-economic risk profile could also deteriorate, according to the report.
“The lack of inclusive growth remains the most significant risk factor, with weak economic growth, high inequality, and unemployment straining the economic policy environment,” the report adds.
“The ANC-EFF coalition government struggles to rejuvenate the economy and sustainably create jobs. While public sector jobs might expand, the private sector finds it difficult to operate and inclusive economic and job growth remains elusive.”
The view that the EFF’S involvement would do little more for the economy than add a layer of radicalism seems to be shared by commentators across the ideological spectrum.
Although the more conservative view is that the EFF’S policies are too leftist to actually work, many on the left believe that the Red Berets are too unscrupulous to carry out a credible economic programme.
In other words, the EFF suffers from what some might call ideological zigzagging — something that could cost the party in the same way that it has the ANC.
I don’t personally subscribe to Steenhuisen’s view that an ANCEFF alliance will burn this country to ashes. Any of the other coalition arrangements currently in view — the Multi-party Charter and an ANC-DA pact included — have the potential to do significant damage, especially given that none will permanently arrest our deepening economic crisis.
The hope then is that, whatever destruction does ensue, a true alternative will rise from the ashes.
The EFF suffers from ideological zigzagging – something that could cost the party in the same way that it has the ANC