Will the "Doomsday Coalition" come to power in South Africa?
South Africa is on the brink of change. For the first time since the liberation from apartheid 30 years ago, the former revolutionary party, the ANC (African National Congress), can no longer govern alone and requires a coalition partner. Should this partner be the radical left-wing EFF (Economic Freedom Fighters), as many suspect, the threat of expropriations of foreign companies and increased tensions with the USA could loom.
The left-wing Marxist EFF could become a coalition partner
At the time of writing this article, the election has not yet been decided. For the first time in 30 years, the “Mandela party” ANC failed to reach the 50% required to govern alone and stands at 42.58%. This leaves the party at a crossroads: it will either form a coalition with the second-strongest party, the DA (Democratic Alliance, 25.82%), or with the third-strongest, the left-wing Marxist EFF alliance. While one might think that the influence of the radical left would be manageable with a preliminary election result of 8.4%, we are all familiar with parties that regularly turn parliaments upside down despite small margins. Experts assume that the EFF will become a coalition partner, as its views—despite their radical nature—align more closely with the ANC than those of the DA, a moderate party with a focus on the economy.
Forced expropriation of white-owned businesses possible
South African citizens are primarily thirsting for change. When apartheid fell, hopes were high for the revolutionary ANC party. Today, however, disillusionment is spreading. Corruption cases, unemployment—especially among young people—widespread crime, and illegal immigration have caused trust in the party to sink. The EFF promises to do what the ANC has failed to do: give South Africa back to Black people. Among other things, the party wants to increase corporate taxes, expropriate white-owned businesses, and nationalize mines. The current, sometimes overly friendly course towards BRICS partner Russia could also intensify and contribute to increased tensions with the USA.
Over 600 German companies on site
In general, we believe it is important and right that the absolute rule of South Africa’s largest party is being broken for the first time. However, like other foreign investors, we are concerned: how many of its plans can and will the EFF be able to implement with its roughly 8% share of the government? Of all African countries, South Africa is Germany’s most important economic partner. More than 600 German companies operate there. We are also directly affected, as we have been planning to participate in a mining project for some time. Accordingly, we are waiting for the final election results with great anticipation.