CR pulls the tiger's tail

3 March 2025 - Will the US impose sanctions against South African political leaders? Is SA’s G20 presidency the answer to the country’s growth problem? Has the balance of power shifted in the GNU? Can a new coalition government in Germany cure the sick man of Europe?

CR pulls the tiger’s tail

President Cyril Ramaphosa appears to be badly misreading his country’s relationship with the United States (US). Last week Mr Ramaphosa told a business audience, “We don’t want to go and explain ourselves. We want to go and do a meaningful deal with the United States on a whole range of issues, and the signals that we’re getting are that we need to enable the development of that process to happen — it’s inevitable that we will get together and do a deal.”

It is not inevitable. In fact, Mr Ramaphosa seems to delight in launching targeted provocations at US President Donald Trump and his administration. Last week, he published an anti-Israel piece in Foreign Policy magazine titled “Israel’s Actions Strike at the Foundations of International Law”, co-authored with the prime minister of Malaysia, Anwar Ibrahim, the president of Colombia, Gustavo Petro, and a left-wing activist, Varsha Gandikota-Nellutla, who is also the acting chair of a new anti-Israel lobby group, the Hague Group.

Far from signalling to the Trump administration a recognition of its priorities and a willingness to compromise, Mr Ramaphosa is doubling down on South Africa’s foreign policy alignment with US foes and against its allies. In response, the US under Mr Trump will not deescalate. South Africa is likely to attract some form of sanctions, including being disbarred from trade benefits under the African Growth and Opportunity Act as well as potential sanctions against South African political leaders and organisations. An additional risk to be aware of is that the US could at some stage impose trading restrictions on South African government debt, limiting the government’s ability to borrow money to fund its deficits.

Despite public rhetorical affront at Mr Trump’s comments, there will be elements in the South African cabinet and government that realise South Africa can ill afford to lose its beneficial relationship with the US. But up to now, they do not seem able to make themselves heard.

The G20 talk shop

Last week Mr Ramaphosa hit on the following focus areas for South Africa’s G20 presidency: climate change resilience and financing (including the Just Energy Transition), the debt servicing burdens of developing countries, and “the development of low-carbon manufacturing value chains, which can support decarbonisation while promoting growth as minerals extraction accelerates to match the needs of the energy transition”. In other words, the focus is on finding ways for developing countries to extract money from wealthy countries under the guise of “solidarity, equality and sustainability”, as South Africa has headlined its G20 priorities.

In terms of practically applying economic, military or diplomatic leverage, and focusing on what South Africa can do in terms of its domestic policy and legislative choices to equip the country to deal effectively with these challenges, the country’s G20 presidency is off to the dampest of damp starts. South Africa should set focused, pass or fail targets for its G20 presidency, focused on growth, fixed investment, and increased goods flows. Less than that and the yearlong period will be heavy on feel-good sentiment but light on meaningful substance. It will also fail to attract the attention of the new, more hard-edged US administration, leading members of which have already said they would not be attending.

The shifting sands of the GNU

Two recent developments have redrawn the Government of National Unity’s (GNU) political landscape. The more significant was the last-minute postponement of the national budget speech to mid-March, which exposed the Democratic Alliance’s (DA) leverage within the coalition. For the first time, the government’s numerical composition had real consequences as the minister of finance, Enoch Godongwana, was effectively blocked from raising VAT by DA opposition.

The DA’s stance forced a dramatic last-minute delay of the budget speech, as it and other parties rejected the VAT increase just hours before Godongwana was set to deliver it. While some noted that opposition came from multiple quarters, the DA’s parliamentary weight meant its position determined the outcome, forcing the ANC into an unexpected retreat. This underscores the real impact of the ANC losing its electoral majority, positioning the DA as a legislative veto-holder within the GNU.

Less publicised but potentially just as consequential for the GNU was Corné Mulder’s unopposed election as leader of the Freedom Front Plus (FF+). Son of apartheid-era minister Connie Mulder and brother of former FF+ leader Pieter, Mr Mulder has deep roots in conservative Afrikaner politics. Crucially, his stance toward both the GNU and the DA is far more hostile than his predecessor, Pieter Groenewald. As FF+ leader in the Western Cape, Mr Mulder facilitated ANC-FF+ deals that helped unseat DA-led local governments – suggesting he might bring this antagonism to the national stage.

Mr Mulder’s leadership increases the risk of the FF+ exiting the GNU. While numerically minor, such a departure would weaken the DA’s position with its conservative Afrikaner supporters, who currently lack a viable alternative. With the FF+ in government, the DA’s right flank is secured; without it, the DA could struggle to retain Afrikaner backing, particularly ahead of the 2026-27 local elections. This risk of Mr Mulder forcing the DA into an uncomfortable position is likely to become a persistent source of tension.

SRF polling

8 months into its existence, the GNU dividend could be running out for the ANC. February 2025 polling by the Social Research Foundation found ANC support at 32% (vs 40% in the 2024 national elections). The DA polled at 25%, up from the 21.8% it got in the election; the uMkhonto weSizwe Party was at 12% (down from 14.6%); the Economic Freedom Fighters were at 6% (down from 9.5%); the Inkatha Freedom Party polled at 3% (down from 3.9%); the Patriotic Alliance registered at 2% (steady compared to 2.1%). The clear decline in the ANC’s support level indicates that more ANC voters especially are now disillusioned with the party.

German elections

The federal election in Germany on 23 February reaffirmed that most Germans support the centrist consensus in Germany, with the more centrist Social Democratic Party (SPD), Christian Democratic Union (CDU), Greens, and Free Democratic Party winning around 60% of the vote. However, the election also showed that there is a major challenge to this consensus from the far left and right, with the right-wing populist Alternative für Deutschland (AfD), the post-communist The Left and Sahra Wagenknecht Alliance (BSW) – a splinter from The Left – together winning around 35% of the vote.

In the national elections for the Bundestag (Parliament), the centre-right CDU, led by Friedrich Merz (likely the next Chancellor) and in permanent coalition with the Bavaria-based Christian Social Union (CSU), secured 28.5%. The former ruling centre-left SPD, led by Olaf Scholz, suffered its worst election result since 1887, winning only 16.4%. The two parties are likely to form a two-party coalition government as they jointly control more than half of the seats in the Bundestag.

One of the big stories of the election was the result for the right-populist Alternative for Germany (AfD). The party doubled its vote share, winning a record 20.8%, becoming the second largest party, and dominating the areas of the former East Germany. However, it will play no role in government because it is shunned by all the other parties. Generally, the election represents a major shift to the right for Germany, especially with regards to immigration. The immigration restrictionist parties of the CDU, BSW and AfD won over 50% of the vote together.

Until recently Mr Merz was considered one of Germany's foremost proponents of closer relations with the United States. Upon his party’s victory he said, “It is clear that the Americans, at least this part of the Americans, this administration are largely indifferent to the fate of Europe.” He added that helping Germany and Europe achieve “independence from the USA” was his “absolute priority”.

Domestically Mr Merz has promised more business-friendly policies, increased support for Ukraine, and a ramping up of defence spending. His party will face challenges in reforming the restrictions on government spending in Germany as they will need support from the populist parties to change the German constitution to remove the “debt brake” which restricts government spending. He will also need to square his party’s immigration restrictionist policies with the pro-immigration policies of the SPD, and navigate difference with the SPD on economic policy.