The new unity government in South Africa is bringing hope to investors for stable economic policies to revive growth, despite concerns over reconciling stark ideological differences between the main coalition partners. The ANC, in power since the end of apartheid in 1994, has teamed up with the white-led DA and other parties to form a Government of National Unity under President Cyril Ramaphosa.
This agreement signifies a major political shift in the country, with potential for economic reforms to address unemployment and inequality. While investors anticipate more liberal economic policies from the unity government, they remain wary of ideological challenges, particularly between ANC’s increased welfare spending and DA’s push for cutbacks and policy changes.
Although populist parties like EFF and uMkhonto we Sizwe have chosen to stay in the opposition, the unity government aims to focus on economic growth, job creation, land reform, and infrastructure development. While the potential for growth-friendly reforms is promising, challenges in establishing a stable policy framework remain.