Experts fear “political instability” for South Africa

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Julius Malema and his red berets won’t hesitate to suggest that they are causing chaos – in fact, that’s the sort of thing the EFF has adopted tactically. But those with strong financial interests in South Africa may be concerned to learn that top industry experts believe there may be a “point of no return” in the 2021 local elections.

The weak return of votes for the ANC “could lead to political instability”

Research Notes published by BNP Paribas this week show how the international banking group expects things to turn out on voting day. They believe that any vote share of 47% or more for the ANC will be the least disruptive to the political and fiscal environment in South Africa, allowing Ramaphosa’s party to push back “populist sentiment.”

However, the more that number decreases, the more likely we are that things will get a little… unstable. If the ANC poll looked at the 40-45% projectile, it would mark a disastrous campaign for the ruling party. While this would be enough to take control of most of Mzansi’s subways and municipalities, such an outcome would have enormous consequences.

Local elections of 2021: is a good performance of the EFF bad news for the financial sector?

BNP, for example, believes that a strong performance of the EFF – as the ANC loses voters – “would indicate a risk” for the SA in the future. If the Red Berets assume more regional political power in the wake of a faltering giant, it could potentially create “political instability” within our borders – and it could just be music to Malema’s ears.

  • If the EFF get more than 15% of the vote, financial analysts say it would “cause nervousness” for South African investors.

“The performance of the EFF will also likely be seen as a risk indicator, usually through the fiscal channel and stemming from the radical populism of the EFF manifesto. The party has everything it takes to win more constituencies – its electoral support is increasing and it has yet to win any governance forum. “

“With only a few councils to administer, EFF would have the national resources to go to great lengths in improving the conditions of the poor if it succeeded in reaching some (small) municipalities. An out-of-trend outperformance of the EFF – above 15% – could lead to political instability and financial anxiety. “

BNP Paribas statement


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