With the national elections on the horizon, South African politics is getting pretty tense.
The DA has launched a bizarrely negative campaign clapping back at the ANC, the EFF continues to disrupt and cause chaos, and the ANC is caught in the midst of a power struggle.
Oh, and Patricia de Lille started the GOOD party, which no one really cares about.
How will it all turn out? BusinessTech looked into a report compiled by consulting firm Intellidex, that outlines five possible outcomes.
Here’s a table with a basic summary of the two good, two bad and one neutral possible outcomes of the upcoming election, followed by a more detailed explanation.
For the full-size table, click the image below:
For the sake of brevity, here are the so-called best and worst possible outcomes of the 2019 general election:
Positive outcome – probability 7,5%
- The ANC gains over 60% of the vote with President Ramaphosa at the helm. They hold onto Gauteng by a decent majority and Ramaphoria mark II takes hold.
- This move cements Ramaphosa’s place as head of the party, both by choice and force.
- This means that Ramaphosa can sidestep ideological blockages within his faction – not on everything, but on enough to get some real reforms such as increased productivity, education and SOEs and encourage ‘real’ new FDI.
- As a result, the rating risk starts to skew towards upgrades. The curve flattens significantly, with SOE risk removed. The currency rallies strongly – USDZAR moves down to around 13,0 thanks to strong FDI inflow.
- Growth rebounds strongly towards this new higher potential growth level – up towards 3,5%.
Negative outcome one – probability 20%
- In this scenario, Ramaphoria mark II quickly dies after the election as Ramaphosa loses Gauteng and needs to be in coalition. The ANC only just retains a majority nationally.
- There is an internal putsch against Ramaphosa which attempts to remove him in 2020. He becomes little more than a figurehead.
- The private sector remains strong with banks’ lending growth remaining broadly zero in real terms. As such growth does continue to recover exceptionally slowly towards low long-term potential growth of 2,0-2,5% — but with shocks like downgrades and SOEs buffeting the economy.
- No reform is possible in this scenario so FDI remains minimal. There is no long-term productivity boost. The currency weakens and we’re all screwed.
The highest probability, 37,5%, belongs to the baseline scenario. This is basically a middle ground between the above two scenarios. Here we see growth economically, alongside some pushback against Ramamphosa. Eskom continues to be a problem – but we saw that one coming.
You can see a description of each of the outcomes, according to the report, here.
Also, if you aren’t registered to vote yet, this weekend is your last chance.
Take 20 seconds to find out if you’re registered here.
[source:businesstech]
