What a year it has been — what could happen did happen in 2024!
Probably the most momentous event in SA’s political economy this year was the general election in May and the seismic shake-up of the political scene. After 30 years of political dominance, the ANC lost its national majority and four provinces — KwaZulu-Natal, Gauteng, the Northern Cape and, again, the Western Cape.
After leading the ANC to a significantly reduced 40% of the national vote, President Cyril Ramaphosa outwitted, outsmarted and outgunned his opponents in the party by cobbling together a nine-party coalition he called a government of national unity (GNU). He succumbed to pressure from business to exclude Julius Malema’s EFF and Jacob Zuma’s newly formed MK party, whose electoral performance provided the biggest surprise of the election by far.
In its rush to get into power without winning at the polls the DA, with its 20% of the vote, forgot to ask for policy change from Ramaphosa. Which meant it has had to implement ANC policies. Only now has the DA woken up to what it signed up to. Among other things, it’s now opposing the Basic Education Laws Amendment Act.
This messy process has pitted Ramaphosa against his party and allies. The Gauteng ANC, which is facing disbandment alongside the KwaZulu-Natal ANC, has driven him into a corner, saying if he signs a watered-down version of the Basic Education Laws Amendment Act as demanded by the DA, he would be deemed a traitor to the revolution.
Though the GNU strengthened Ramaphosa in the wake of a poor election result, and kept the ANC in power for now, it has also potentially sowed the seeds of his political demise, which is now both inevitable and imminent.
The GNU arrangement is unpopular among many South Africans both within and outside the tripartite alliance. Its most vocal critics are the SACP and Cosatu. The former is now planning to contest municipal elections on its own.
Meanwhile, should the provincial executives of KwaZulu-Natal and Gauteng be disbanded this is likely to benefit MK and further weaken the ANC.
Even though the GNU has hitherto proven more stable than coalitions at the local government level, the benefits to SA’s real economy aren’t trickling down fast enough.
Surprisingly, load-shedding paused in 2024 after reaching record levels in 2023. However, none of this had anything to do with policy changes such as the complex unbundling of Eskom into three subsidiaries — for generation, distribution and transmission — under a holding company, or the deployment of soldiers to guard Eskom’s infrastructure.
Three factors played a role in this turnaround. The economy is not performing well, suppressing demand for electricity; many households and businesses that could get off the grid have done so; and Eskom has been blessed with a competent management team that has not been subjected to political interference.
Even though the GNU has hitherto proven more stable than coalitions at the local government level, the benefits to SA’s real economy aren’t trickling down fast enough. Gilts and equities have been major beneficiaries of improved confidence, rather than the real economy.
Much of this has to do with the uncertainty regarding Ramaphosa’s longevity. He remains the glue that is holding the GNU together, but this will depend on whether he can maintain his grip on the ANC.
The economy’s fortunes are unlikely to improve any time soon. Eskom is slowly turning the corner. But Transnet is not. It continues to hobble the economy’s performance. The private sector’s partnership with the government is helpful, but insufficient to engineer a quick recovery. As well as inefficiencies, Transnet’s key problem is equipment shortage, not debt.
While the decline of the ANC was foreseen, three things were unforeseen: Zuma’s political comeback via the MK party; the EFF’s flop at the polls; and the unthinkable — Floyd Shivambu, Malema’s deputy and EFF co-founder, leaving the EFF for MK.
Despite the chaos in its processes and frequent dismissals, the MK, really a family enterprise, has shown resilience and coherence. But this will depend on how long 82-year-old Zuma survives. Early next year he goes on trial for corruption charges that date back to the 1990s. His then legal adviser, Schabir Shaik, went to prison for soliciting bribes for Zuma from foreign arms makers — the same case that Zuma is only now going to trial for.
Unlike Zuma, Malema will go to an elective conference this weekend, without his co-pilot, Shivambu, for the first time. Despite his party’s decline Malema is guaranteed to secure his position. The real challenge will be whether he can arrest the EFF’s decline ahead of the 2026 local government polls.
Globally, three events had an impact on SA this year. Russia, an old ANC ally and SA’s Brics partner, has still not managed to defeat Ukraine and there is a fear that an increasingly desperate Vladimir Putin might be tempted to use nuclear weapons. The SA-led African mediation of the conflict has all but fizzled out.
For the first time Iran and Israel exchanged direct fire during 2024. Up until then the two had largely fought a long-running war through proxies. Also, the Middle East conflict became regional.
The SA government filed a charge against Israel at the International Court of Justice, alleging genocide, a move that rattled Pretoria’s Western allies and alienated some ANC supporters.
And finally, Donald Trump made a spectacular return to the White House after a bungled campaign by the Democrats to hold on to power. Trump, who survived an assassin’s bullet, defeated Kamala Harris who campaigned for only three months after Joe Biden pulled out.
Trump’s return, with his isolationist posture, is likely to define SA’s fortunes next year.
• Dludlu, a former editor of The Sowetan, is CEO of the Small Business Institute.
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