End of May 2024
Since the recent conclusion of the elections, we’ve decided to pause our ‘Team Chats’ to delve into some of the outcomes from the elections held on the 29th of May 2024. Our chats will resume in the next newsletter – August 2024.
Five years ago, I wrote the following in the May 2019 newsletter: “In what is believed to have been the most important elections since 1994, there was very little market reaction.” How time flies, and how mistaken the political analysts and media were at the time. In hindsight, the elections on the 29th of May 2024 turned out to be the most crucial since the dawn of our democracy.
Election Results Update
The recent election results, while mostly expected based on polls, still had some surprises. The Electoral Commission of South Africa [IEC] reported the lowest voter turnout in 30 years, with only 58.64% of the 27.7 million registered voters casting their votes. Out-of-country votes had the highest turnout at 66.5%, with over 75% voting for the Democratic Alliance. This was followed closely by KwaZulu-Natal [KZN] with a turnout of 62.3%. The above graphic highlights these numbers.
Former President Jacob Zuma’s new uMkhonto weSizwe [MK] Party received 46% of the votes in KZN, ahead of the ANC’s 18%. The ANC secured more than 50% of the vote in five out of nine provinces but fell short in the Northern Cape and Gauteng, requiring coalition partners to form a government. The DA maintained its majority in the Western Cape and received 1,070,020 votes in Gauteng compared to the ANC’s 1,464,166 votes [37.76% vs 27.44%].
For the first time in 30 years, the ANC lost its parliamentary majority, receiving 40.18% of the national vote. The ANC had consistently received a majority in national elections since 1994 but saw a decline in recent years, winning 57.5% of the vote in 2019. The DA has come second in the past five elections.
In the National Assembly, the ANC won 159 seats, down from 230 in 2019. The DA increased its seats from 84 to 87, while the EFF and IFP lost seats to the MKP, which received 58 seats.
We now await the first sitting of the newly elected National Assembly, where members will be sworn in, and the speaker will be elected. The Assembly will also elect the president of South Africa, who will then appoint the cabinet and form the government. This process typically takes a couple of weeks to ensure a smooth transition of power.
The election outcome, with no clear winner, leaves coalition talks and future policies uncertain. The Rand experienced volatility but regained some strength amid discussions of forming a National Unity government. It’s crucial for the ANC to work with more market-friendly parties to continue positive policy reforms and possibly revise [or eliminate completely] others, such as the recently signed National Health Insurance Bill [NHI].
National Unity
The widely popular term ‘National Unity’ in governance aims to include major political parties in the legislature, allowing different parties to oversee various ministerial portfolios – this outcome could have a very positive impact on our economy going forward. The proof is in the pudding so it will be interesting to see how this will all play out.
By the time you read this newsletter, the Comrades Marathon will be over. This event, with thousands of runners and supporters between Durban and Pietermaritzburg, shows how sport unites us. National unity and pride bring South Africans together, transcending individual differences. While many of us feel ongoing worry about the future of South Africa, let’s remember that through national unity, we have and can continue to create a future we and our children can be proud of.
While maintaining a realistic view of the uncertainty and volatility that will continue in the markets, we prefer increasing the overall global exposure in your portfolios. Not only have we seen good returns globally, but the weaker ZAR positively impacts the return on these investments. If you have any concerns, please don’t hesitate to contact us – we would love to meet with you and discuss these concerns and any investment queries you may have.
“Stacey Barron”
Finlaw Consulting “Alone we can do so little; together we can do so much.”
