SA's coalition negotiations expected to shake the markets
The African National Congress (ANC) will have to knock on a few doors to find coalition partners after the party lost its majority in last week’s polls.
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JOHANNESBURG - South Africa’s complicated coalition negotiations are expected to keep markets jittery for some time as domestic and international investors take stock of the country’s election results.
The African National Congress (ANC) will have to knock on a few doors to find coalition partners after the party lost its majority in last week’s polls.
READ: Some independent candidates weighing options on joining coalitions
The country’s policy direction is now in the spotlight as political parties meet behind closed doors to strike a power-sharing deal.
There are a number of scenarios on the cards including a coalition between the ANC and Economic Freedom Fighters (EFF), the ANC and the Democratic Alliance (DA) or the ANC and the MK Party.
Wits Business School Professor Jannie Roussouw says the uncertainty is not good for equity and capital markets.
“At the moment in South Africa, an hour in politics is a long time.”
Efficient Group economist Dawie Roodt says the markets are likely to stabilise after coalition agreements have been finalised.
“In fact, in the past day or two the markets continued to react quite negatively as uncertainty prevails about who is going to be in coalition with the ANC.”
The ANC and the DA have assembled separate teams of negotiators to deal with the matter.