South Africa election: Economy wake-up call for ANC?


The African National Congress (ANC) won the South African national elections in a landslide victory, but the party Nelson Mandela took to power in 1994 has seen see its dominance shaken.

The ANC party, which has ruled for 20 years, won 62.16 percent of the votes, according to the country's electoral commission. By comparison, its majority topped 65 percent in each of the three previous elections in 1999, 2004 and 2009.

The drop in this election of around 3 percent, while not massive, is significant according to analysts. They attribute this to dissatisfaction with the country's stumbling economy.

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"The ANC's support has been eroding slowly in the last few years and the reason for that is because people are unhappy with the state of the economy," Anna Rosenberg, a Sub-Saharan Africa specialist at advisory firm Frontier Strategy Group, told CNBC in a phone interview.

'Wake-up call'

South Africa's economy has been on a downward slide under the ANC. Its economy grew 1.9 percent in 2013, according to official statistics, down from 5.6 percent in 2006. This contrasts with the above 5 percent economic growth that Sub-Saharan Africa saw as a whole.

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In addition, unemployment is crippling at 25 percent and this has not helped the ruling ANC's popularity. The ANC has also been tainted with corruption charges, with President Jacob Zuma accused of spending $23 million of government money on upgrades to his house, including installing a swimming pool and a cattle enclosure. Zuma's unpopularity was highlighted when he was jeered and booed at during his speech at Nelson Mandela's memorial in December last year.

The small loss of votes at this election could act as the nudge the ANC needs to make critical reforms, according to analysts.

"It should be a wake-up call; it has demonstrated that elections are going to get harder-and-harder for them, and will be more difficult for the ANC to win outright," Tom Wilson, director of intelligence and analysis at Africa Practice, told CNBC in a phone interview.

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He added: "That should give the ANC some latitude to re-engage with business and refocus on the South African economy, taking a harder stance with organized labor and pushing an economic and industrial policy focussed on driving the economy forward. Job creation is going to be absolutely critical."

Populist rise

The ANC's main opposition, the centrist Democratic Alliance, is trailing on 22.22 percent. However, one of the biggest surprises in the build-up to the elections was the rise of the Economic Freedom Fighters (EFF), a party formed by expelled ANC member Julius Malema last year.

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The EEF, which is under a year-old, clocked-up just over 6.3 percent of the votes. The party has called for the nationalization of the banking and mining sectors, promised to tackle high unemployment, and combat corruption.

The themes resonate with the new black aspiring middle-class in South Africa, according to analysts.

"Their message is one that is not so much targeting the poor, but a young working-class male voting population that feel they have benefited from growth in post-apartheid South Africa, but have not benefited enough," Christopher Vandome, Africa Programme research assistant at Chatham House, told CNBC in a phone interview.

"There is a young unemployed male franchise who are particularly drawn to this very nationalist economic rhetoric," he added.

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