An emerging risk for the DA

12 May 2025 — What political risks lie ahead for the DA? How is Paul Mashatile positioning himself in anticipation of the 2027 ANC elective conference? What does Operation Vulindlela Phase II mean for reform and growth? Why is Dada Morero announcing new spending plans? What progress is South Africa making in Washington trade negotiations?

An emerging risk for the DA

The Democratic Alliance (DA) faces an emergent political risk stemming from its unprecedented breakthrough among black voters. According to recent polling by the Institute of Race Relations (IRR) and the CRA, the DA tripled its support among black registered voters from 5% to 18% between October 2024 and April 2025.

The gain, driven by a sharp focus on opposing value-added tax (VAT) increases and advancing economic growth policies, has positioned the DA ahead of the African National Congress (ANC) nationally, polling at 30.3% to the ANC’s 29.7%. This realignment of voter support has unsettled the political status quo and is likely prompting a strategic backlash aimed at undermining the DA’s newly broadened appeal.

There are indications that political rivals, from the ANC to ActionSA to the Economic Freedom Fighters, are attempting to bait the DA into defending positions that could be framed as anti-black, thereby weakening its cross-racial traction and newly gained foothold in support from black voters. These attempts include renewed public focus on historically sensitive flashpoints such as “Afrikaner enclaves” Kleinfontein (Gauteng) and Orania (Northern Cape), as well as rejuvenated contentious policy debates around race-based employment equity targets. There is a strong likelihood of sudden movement on expropriation without compensation (EWC) or the Basic Education Laws Amendment (BELA) Bill, particularly where language of instruction and Afrikaans schools can be used to suggest the DA defends minority privilege over transformation.

Targeted provocations around these issues, when weaponised, create a narrative trap: if the DA condemns racism, it may still be accused of insufficient transformation; if it sidesteps the issues, it risks appearing complicit. The ANC, now registering only 37% support among black voters, has a clear incentive to elevate identity-based controversies and reassert race as the defining political fault line. In such an environment, even isolated incidents could be elevated into national spectacles, strategically timed to sow renewed race-based distrust of the DA, costing it its momentum and heightened traction among black voters in particular.

Building toward 2027

The deputy president of the ANC and of South Africa, Paul Mashatile, is using all his private and public engagements to put forward his policy preferences, as well as his vision for the ANC and the country. This is all with a keen focus on building support for his party presidency campaign that will culminate at the 2027 party elective conference, where his biggest challenger will likely be the current secretary general of the party, Fikile Mbalula.

Mr Mashatile is positioning himself as an opponent of the DA’s involvement in the Government of National Unity and is leaning into populist policies on the domestic front. While speaking in the Eastern Cape he told attendees, “We shall further use the Expropriation Act as a tool to advance land justice. I know some do not like this act, but we will implement it whether they like it or not.” This can be read as a veiled threat to the DA and its voters.

Operational Vulindlela redux

Operation Vulindlela, a joint initiative of the Presidency and the National Treasury, is the government’s flagship reform programme, intended to secure structural reforms aimed at accelerating economic growth. The programme was launched in 2020 and has failed to lift the economic growth rate, which registered at 0.6% in 2024 and 0.7% the year before. The unemployment rate has remained stubbornly stuck above 30% since the initiative was launched.

Last week President Cyril Ramaphosa launched the second phase of Operation Vulindlela, which is aimed at improving performance in local government, addressing spatial inequality, and supporting digital transformation. Its impact on economic growth is likely to be as insubstantial as that of the first phase because it ignores key policy constraints on growth, including property rights threats, race-based distortions in hiring and procurement, lacking accountability in government, and weak law enforcement.

Between 2012 and 2023, South Africa’s economy grew at an average 0.8% per year. Fixed investment as a share of GDP, measured by the gross fixed capital formation (GFCF) indicator, has struggled to breach the 15% mark. That is far below the global average or the government’s target of 26% and 30% respectively. Ongoing threats to property rights, high crime rates, unreliable electricity and water supply, and a teetering logistics network all contribute to keeping fixed investment low, and with it, economic growth. As long as the barriers to fixed investment are not removed, initiatives like Operation Vulindlela will not be successful in accelerating economic growth meaningfully. Just last week, Moody’s cut its growth forecast for South Africa from 1.7% in February to 1.5%.

Manufacturing in recession

Manufacturing contracted for a second consecutive quarter in Q1 2025, declining by 2.3%. The sector contributes 12%-13% to South Africa’s GDP, and its contraction is expected to be a significant drag on overall first-quarter GDP growth. In terms of output, manufacturing is 8% lower than it was before the start of Covid-19 lockdowns in 2020. An index measuring anticipated business conditions in the coming six months has started pointing towards contraction.

Joburg ANC opens the pre-election spending taps

Johannesburg, South Africa’s commercial capital and a proud city in rapid decline thanks to political instability, corruption and mismanagement, will be one of the most important battlegrounds in the upcoming local government elections.

Despite its worsening condition, Johannesburg remains important, contributing 44% of Gauteng’s GDP and 15% of South Africa’s GDP. However, in 2023, the Auditor-General found that Johannesburg had lost R21.8 billion to waste, irregular deals and unauthorised spending. For context, the city’s budget for 2024/25 was R76.4 billion.

The upcoming local government elections can take place anytime in a three-month window from early November 2026 to early February 2027 but are most likely to be held at the beginning of that period. That means they are less than 18 months away.

Political parties are already starting their campaign preparations to start influencing how voters perceive them. In a recent poll conducted by the Brenthurst Foundation, 78% of Johannesburgers said their city was going in the wrong direction. When asked which party they would vote for, 33% opted for the DA (up from 26% in the 2021 local government elections), while 32% chose the ANC (down from 34%). The elections are shaping up to be hotly contested, with last week’s motion of no confidence in the mayor and the speaker from the DA an early indication of conflicts to come.

In his state of the city address, the executive mayor of Johannesburg, Dada Morero, last week announced plans to spend billions to improve service delivery and upgrade infrastructure despite describing the city’s financial situation as “fragile”.

Notably, Mr Morero announced investments in poorer areas such as Diepsloot, Orange Farm and Zandspruit, but none for the areas where the city collects most of its rates. Instead, ratepayers were threatened, with the mayor promising the city would be “robust in collecting revenue from those who have the means to pay” and adding that the city had “no choice but to insist on proper financial discipline”. This will further raise the ire of Johannesburg ratepayers, who are forced to pay escalating fees and levies while receiving worsening services.

Our call is that Mr Morero’s plans will have little impact ahead of the elections because the time is too short, the money too little, and the administration’s skills inadequate.

SA fails to make progress in Washington

The United States (US) is one of South Africa’s most valuable trading and investment partners and a key potential source of funding to increase South Africa’s rate of fixed investment. However, diplomatic relations remain fraught, with sources in Washington, D.C. confirming that the South African government’s attempts to improve them have so far been unsuccessful.

Reasons mentioned included that there was no willingness in Washington to entertain arguments from the South African side based on a sense of grievance or entitlement, that no proposals for a deal worthy of discussion had been presented and that South African envoys did not have the power to strike a deal. Pressure is going to mount over the lack of progress because the temporary suspension of a 31% US import tariff on goods from South Africa expires on 9 July, in 58 days.