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LEVICK

June 24, 2019

South Africa: The Slow Decline of the ANC

In early May, the storied African National Congress (ANC), the party of Nelson Mandela that’s become known in more recent years for corruption and state capture, dipped below 60% of the popular vote for the first time ever in a national election. This result comes three years after the party lost control of key municipal governments in Johannesburg, Tshwane (Pretoria) and Nelson Mandela Bay (Port Elizabeth) in local elections.

Polling shows that the party’s strongest support comes from older generations and as the years go by, the ANC will become exceedingly weaker. The ANC is not likely to lose power at the national level anytime soon, but, coalition governments are likely to be more and more common at the municipal and provincial level over the next decade.

What does all this mean for international corporations? Well, the economy continues to be anemic and the regulatory environment troublesome. The looming fear of land nationalization without compensation will continue to give companies pause. However, given the ANC’s continued dominance over politics and their track record of slow change, we certainly envision more of the same economic management.

International corporations that continue to operate business as usual may well continue to have problems. As the recent state capture corruption scandal and subsequent inquiry has shown, South Africa’s institutions are robust, and, major corporations have been caught in the web. Companies must carefully manage their legal and regulatory compliance, but, they also need to have a more complex political and public affairs positioning. Understanding the tricky stakeholder environment and developing nuanced messaging that help advance your company’s policy agenda is critical to your success in the new South Africa.

Matthew A. McMillan is the President of BuzzMaker (www.buzzmaker.net).

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