The new dawn of a coalition government has brought with it uncertainty amongst businesses as there is no clarity of how political leadership will take shape going forward.
With the election results showing there will be a coalition government at a national level, as there is no outright majority winner, policy direction is in question.
The local economy is battling low growth levels, high unemployment and low business confidence.
Experts say the perceived lack of continuity in terms of policy direction could impact investor confidence negatively.
Markets analyst Patrick Mathidi says business prefers certainty, and any possible change in policy direction could lead to jitters in the markets.
Mathibedi says, “If there is a change in policies that are anti-growth, we could see the path of unemployment degenerate, we could see more hardships for our people, we could see inflation remain much higher for longer which means the MPC will keep interest rates higher for longer, which then becomes more punitive in terms of growth. So the consequences are there for all to see if we start adopting policies that are populist or are anti-growth, that are anti-business.”
Growing economy
Member of the BRICS Business Council, Stavros Nicolaou says a pressing need for South Africa currently is a government that will get the economy growing.
He says going forward a government of national unity could be what the country needs.
Nicolaou says, “The low road of coalitions is regrettably what we have seen in many of our metros around the country where you have self-interest and fractious politics coming into play, that’s what we do not need. Hopefully, we have learnt from some of these coalition errors in the past few years.”
He says political parties and the leaders must put the country first when considering coalitions.
“We need to do so because investors want certainty, predictability and stability. We have a unique opportunity. We are on the cusp of a completely different direction in the country. We can do away with fractious politics that we have seen in the past and set the country on a different trajectory and that is what as a business we would encourage the political parties and leaders to put the country first.”
Black Business Council CEO Kganki Matabane also calls for leaders to put the interests of the country first.
Matabane says, “What we are hoping, and this is what we are busy lobbying for is to ensure that whatever form of coalition or arrangement happens, there is not going to be serious policy change and policy direction. There must be certainty, business wants certainty.”
He says, “SA must remain as a market-friendly, SA should remain as a democracy like it is …but we need leaders, we need leaders who are sober, who are going to be sitting down with each other and put the interests of the country first.”
Matabane says the political party interests should come second, as the results show the electorate said they do not trust one party forming government, but rather have given the parties a mandate to govern as a collective.
VIDEO: SA election impact on the economy with Tshepo Mongoai:
