ANC-DA coalition likely to ease market shivers, say economists
The ANC lost power for the first time since 1994 – sparking concerns about the impact of the election outcomes on the rand, the markets and the economy.
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JOHANNESURG - Some economists believe a coalition agreement between political rivals the African National Congress (ANC) and Democratic Alliance (DA) could help to ease market jitters.
Investors are believed to be worried about policy uncertainty as the ANC scrambles to find a coalition partner after its dismal showing at the polls.
The ANC lost power for the first time since 1994 – sparking concerns about the impact of the election outcomes on the rand, the markets and the economy.
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Wits Business School professor – Jannie Rossouw – said a market-friendly coalition was needed for financial stability.
“The best coalition would be of parties that respect the Constitution. Former President Zuma has already said, as the leader of the MK Party, that we should have a parliamentary democracy and not a constitutional democracy.”
Efficient group economist Dawie Roodt agreed: “The financial markets would prefer a coalition to the right – with the ANC and the DA kind of coalition but there’s always a possibility that final outcome could be a coalition to the left with the EFF or the MK for example and that would be really bad news for the financial markets.”