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South Africa’s ruling African National Congress party has signed a landmark power-sharing deal with its former rivals in the Democratic Alliance, paving the way for a new government to be formed under the leadership of the African National Congress. leader of Cyril Ramaphosa of the ANC.
Such an agreement is crucial to allowing the ANC, which lost its majority for the first time since the end of white minority rule 30 years ago in the May election, to maintain power. Ramaphosa is expected to be reappointed president later on Friday.
John Steenhuisen, leader of the white-led DA – a party that previously opposed the apartheid government in the whites-only parliament at the time – told reporters the deal was a “historic” moment for the country, which will allow the party to now become “co-manager”.
“This gives South Africa the opportunity to create a stable democracy and an inclusive economy,” said Helen Zille, DA chairperson, who signed the agreement with ANC secretary-general Fikile Mbalula.
The deal is also supported by the Zulu-dominated Inkatha Freedom Party (IFP) and the Small Patriotic Alliance, which cheered investors because it excluded Julius Malema’s Economic Freedom Fighters and Jacob Zuma’s Umkhonto weSizwe (MK) – both progressive parties pushing for the nationalization of banks and key industries.
South Africa’s currency, the rand, rose against the dollar on news of the deal after recently weakening on fears that the ANC would form a coalition with the left-wing EFF.
The agreement follows lengthy negotiations between the ANC – the former liberation movement under Nelson Mandela – and opposition parties. The breakthrough came at the 11th hour on Friday as parliament began its first session since the election.
The nine-page document commits the parties to “cooperate through a voluntary government of national unity”. The DA agreed to support the ANC’s choice of Ramaphosa as president and the ANC’s Thoko Didiza as speaker of parliament. In return, the DA candidate will be vice president.
But the power-sharing agreement also paves the way for the DA and other parties to be given cabinet positions and “leadership positions” in certain parliamentary committees, of which the IFP will become “chairman”.
The document stipulates that while the president retains the power to appoint his cabinet, this must be done “in consultation with the leaders of the respective parties.”
In case of disagreement, the agreement stipulates that “the principle of full consensus shall apply,” defined as the support of parties holding at least 60% of seats in parliament. Steenhuisen said the DA would fill cabinet and parliamentary posts “in proportion to the proportion of our seats”. The DA won 21.8% of the vote, compared to 40.2% for the ANC.
The coalition agreement includes nine high-level priorities aimed at fixing South Africa’s ailing economy, which has struggled to exceed 1% annual growth over the past decade. These range from “rapid, inclusive and sustainable economic growth” to “local government stability”.
Velenkosini Hlabisa, the IFP leader, told the FT that his party was “still part of the deal” but that “the issue of cabinet positions” would only be discussed later.
Investors said they liked a deal between the ANC and the pro-market DA, believing it would ensure policy stability and potentially boost economic growth.
Ann Bernstein, chief executive of the Center for Development and Enterprise, a Johannesburg-based think tank, said the deal opened the door to reviving the country’s economic growth.
“It is vitally important that parties committed to the rule of law and the constitution come together to build a government based on those principles, because there are much worse alternatives. After 15 years of stagnation, this is an opportunity for a decisive government to really accelerate growth,” she said.
“The country is in crisis, but this national unity government could be a very positive development. The ANC’s unequivocal acceptance of the election results is a very important moment for South Africa’s democracy,” she said.
