The impact on business that coalition governance could have beyond the 2024 elections

Election posters on lamp-posts in Claremont, Cape Town.

Election posters on lamp-posts in Claremont, Cape Town.

Published May 26, 2024


Purshottama Reddy

South Africa will be shortly conducting its seventh general elections on 29 May 2024 following 30 years of democracy in the country. The 2024 elections have been deemed to be a watershed event and a turning point for the post 1994 democratic regime as it had unrivalled and firm support in the past six elections.

However, this time around, as predicted by many political analysts, the situation is likely to change with the ushering in of potential coalition governance, particularly at the national and provincial governmental spheres.

In the event that the governing party does not secure the required votes, it will be a tactical and calculated choice to enter into a coalition with one or more of the smaller parties nationally and provincially. By the same token, the smaller parties, some of which have already reached their peak in terms of voter support will also be scouting around for strategic partners to enter the governance arena.

Some of them are likely to emerge as kingmakers, or the placement of members in strategic positions, despite their limited voter support. Recent developments at the local governmental sphere bears ample testimony to that. There is a firm view that this is possibly going to be the new governance mode henceforth, that is the “new normal” nationally and provincially in the future.

Consequently, it is imperative to demystify the notion of coalition governance and reflect on the likely impact it will have on business generally.

Coalition governance is a fairly new phenomenon in African politics and much newer in the South African political landscape. In fact, it was introduced in 2000 about 24 years ago in South Africa at the local level, but it is certainly a very new development at the national and provincial governmental spheres. Coalition governance at the local government sphere, particularly in the metropolitan municipalities, and the ongoing political tradeoffs and the resultant instability depicts a scenario that is far from ideal and leaves much to be desired. It definitely does not inspire much confidence in the majority of the citizenry, if the national and provincial government is also deemed to be moving in the same direction.

Given the uncertainty that is prevalent in the country nationally, it may perhaps be opportune at this juncture to reflect on the possible impact of coalition governments on business generally, drawing on the experiences of the local government sphere in South Africa to date:

- coalitions tend to focus on personalities and people rather than the economy. It is a given that political tradeoffs do not necessarily benefit the economy, businesses or the local communities;

- decision-making/policymaking is delayed as the views of the different political parties have to be taken cognisance of everything has to be passed through the political parties in question and the respective politicians. It is difficult for the legislatures to engage in decision-making and policymaking as the political space has increased considerably with the emergence of more political parties. This impacts negatively on critical issues linked to and dependent on the budgets. All of these dynamics would in turn impact on projects and programmes and ultimately the discharge of service delivery.

- coalitions generally have a restraining effect on businesses that are desirous of expanding and investing, as there is a climate of uncertainty. Additionally, there is a possibility that businesses have to align themselves with certain political parties. It is a given that business interests cannot always be aligned completely with those of political parties as the bottom line for business is generating high returns for their shareholders and owners. In addition, financial long-term sustainability is a key consideration for private companies.

There are some positives that are likely to emerge from coalition governance, that can be viewed as beneficial. Key among these is the divergence of views on the economy from the different political parties which is likely to enhance and develop the country. Additionally, the notion of public accountability will be more marked as there are more role-players from different political parties involved in executive decision-making/policymaking.

Furthermore, the prospects for engaging in nefarious activities like corruption is fairly limited as there are more political parties in that governance space than previously, and it will be difficult to engage in clandestine and undisclosed deals behind closed doors. In addition, it is true that most politicians are cognitively short-sighted, and are in the business of surviving well in short-term dispensations, other than career public service and business persons, and academics who generally desire to pursue long term progress and sustainability.

Coalition governance has been in existence for several decades in the established western democracies internationally, more specifically in Europe. In fact, some of the countries with coalition governments, notably Germany, Belgium, Sweden, Netherlands, United Kingdom and Ireland are very stable politically and have built up strong economies over the years. Coalition governments have been fairly successful in the above–mentioned countries as there has been a certain level of political maturity among the political parties in question.

In particular, individual politicians who are engaged in the governance process often perform very well. Furthermore, these coalition governments are governed by binding agreements to which they should adhere to, and most importantly the needs of the citizenry have always been placed high on the governance agenda.

The government in its entirety and the individual political parties are in regular contact with the citizenry and a key priority is qualitative service delivery. There is a harmonious relationship between the different political parties and the overarching principle in the governance process is an enhanced quality of life for the citizenry.

A strong partnership has developed between the government, private sector and civil society which has reinforced the public governance process.

* Purshottama Reddy is a Professor in the Graduate School of Business at the University of KwaZulu-Natal and co–editor of the book by Kariuki, Reddy and Wissink: Coalition Building and Municipal Governance in South Africa: Implications for Municipal Leadership and Service Delivery.

** The views expressed herein are not necessarily those of Independent Media.