The GNU holds — just

30 June 2025 — Why didn’t the DA leave the GNU? Are we seeing the first signs of BEE policy changes? What does the US want SA to do to improve bilateral relations? What risks keep consumers, businesses and insurance brokers up at night?

The GNU holds — just

Tensions in the Government of National Unity (GNU) spiked following the firing of Democratic Alliance (DA) deputy minister, Andrew Whitfield, by President Cyril Ramaphosa on Wednesday. In response, the DA issued a 48-hour ultimatum to Mr Ramaphosa on Thursday: either fire African National Congress (ANC) ministers implicated in corruption or other malfeasance, or face “drastic consequences”.

The implication was a DA exit from the government to be announced on Saturday afternoon. Such was the expectation of departure that Mr Ramaphosa cancelled a visit to Spain to be able to respond domestically to the consequences of the DA’s return to the opposition benches.

However, when the ultimatum period ended, the DA did not announce a withdrawal from the GNU. Instead, it said that it had decided not to engage with the National Dialogue, a flagship social cohesion project of Mr Ramaphosa’s, and that it would vote against departmental budgets linked to corruption-implicated ANC ministers.

As retaliatory steps from the DA, these actions fell far short of expectations and were met with ridicule. However, the DA cannot afford to depart a GNU that is popular without compelling reason. A departure on weak grounds would be punished by voters and would represent a disastrous return on the DA’s GNU investment.

The DA’s press conference on Saturday was notable for what was implied rather than announced. The DA leadership has evidently concluded that the party’s membership of the GNU has become unsustainable. It has signalled that — absent a significant change in its relationship with the ANC — forcing a confrontation with its partner over the issue of corruption is its most feasible route to a credible exit that would incur minimal political damage to the DA.

But while exit may now be a question of “when”, not “if”, the DA’s public case for departure is currently too weak to justify the risk of an ANC-MK-EFF government to voters.

We are likely to see the DA adopting a more assertive approach in its dealings with the ANC, including countenancing being expelled from the GNU, for example over pressure relating to the issue of corruption. Evidence of the ANC’s willingness to entertain such a drastic step crystallised within hours of the DA’s Saturday announcement.

The press conference also showed that the DA leadership was now seriously considering calling a motion of no confidence in Mr Ramaphosa or his cabinet, as the party’s confidence in the president’s ability to lead the GNU is rapidly waning.

It appears that South Africa is moving further away from a situation where the two largest parties in the GNU, the ANC and the DA, can cooperate to make the hard decisions that will produce economic growth: tackling crime and corruption and replacing anti-growth policies with pro-growth policies. This appears to be a bridge too far for the ANC, which has not adjusted to the reality that it no longer has a majority.

Ramaphosa considers BEE review

Mr Ramaphosa said on Wednesday that the government was considering a review of Broad-Based Black Economic Empowerment. This is a sign that growing criticism of this race-based policy from domestic and foreign commentators is hitting home. However, as things stand, the BEE review will likely lead to stricter BEE. Mr Ramaphosa said that the purpose of the review was to improve BEE effectiveness, address gaps in implementation, set timelines and link BEE to industrial policies.

Mr Ramaphosa, who is a staunch defender of BEE and one of its most prominent single beneficiaries, presented BEE as a pro-growth measure. This claim is disputed by local and foreign critics, as well as being contradicted by South Africa’s anaemic growth rate over the past almost two decades. Race-based laws are also becoming a stumbling block in South Africa’s relationship with the United States (US), one of its main trading partners.

Mr Ramaphosa’s doubling down on race-based laws means that these rules will continue to restrict investment, acting as a brake on South Africa’s economic potential and reducing its business opportunities. A small circle of insiders will benefit, while most of South Africa’s population will be left worse off.

Joburg mayor lives to fight another day

The ANC mayor of Johannesburg, Dada Morero, survived a motion of confidence last week. The motion was brought by the DA, which accused the mayor of leading a dysfunctional and deteriorating city— an assessment that many Joburgers and visitors, including Mr Ramaphosa, share.

With approximately 18 months to go until the next local government elections, the DA will not be too troubled that its motion was unsuccessful. It would have been an inopportune moment for the DA to take the reins of power because it would not give it enough time to demonstrate improvements in Johannesburg to shore up its support.

The purpose of the motion of no confidence was rather to unsettle the ANC-led coalition governing the city, demonstrate action to DA supporters, and show that the councillors of the ANC and its coalition partners are content to keep supporting a mayor who has produced no results of substance in the 10 months of his mayorship. However, this political theatre will not produce any concrete improvements for the people of Johannesburg in the near term.

More Afrikaners visit Washington

Last week, a delegation of “Afrikaner leaders” comprising Theo de Jager (Southern African Agri Initiative), Dr Corné Mulder (Freedom Front Plus), and Gerhard Papenfus (National Employers’ Association of South Africa) visited Washington, DC, for formal talks with senior officials in the Trump administration.

White House officials used the opportunity to issue an unambiguous diplomatic message via the Afrikaner delegation, signalling that Washington would not pursue deeper strategic ties with Pretoria unless four specific conditions were met:

1. The classification of farm attacks as priority crimes;

2. An unequivocal public repudiation of the “Kill the Boer” slogan by top South African leaders;

3. A commitment to protect private property rights by scrapping or amending the EWC policy to ensure market-related compensation; and

4. The exemption of US firms from BEE requirements that they viewed as race-based ownership hurdles.

While the “Afrikaner delegation” was careful to present itself as a group of unofficial envoys without constitutional authority, it undertook to relay the substance of the White House’s position to both the South African public and government.

However, given the antagonistic official response to the delegation, advancement of the issues raised appears unlikely. The South African Presidency issued a stern rebuke, describing the visit as “sabotage diplomacy” that undercut recent governmental efforts to rebuild trust with the White House. Though what these efforts might be, given the lack of action on key issues in the month since the Oval Office meeting, is unclear.

Domestically, the visit further laid bare deepening ideological tensions between the ANC’s statist, race-based economic framework and a growing constituency, both local and international, that views such policies as corrosive to economic growth, investor confidence, social cohesion, and constitutional non-racialism.

In CRA engagements, US government representatives continue to express their diplomatic frustration with the South African government’s apparent belief that further engagements with US counterparts along the lines of “explaining South Africa’s position on X issue, and how Y domestic policy really works” will fix US-SA bilateral relations. With the 9 July deadline for the reimposition of high trade tariffs looming, this could turn into an expensive error in judgment.

It’s the economy, stupid

A survey of almost 900 consumers, businesses and insurance brokers by Santam, South Africa’s leading short-term insurer, reveals the risks that various groups are the most worried about.

For consumers, the top three perceived risks were: the increasing cost of living (66%), crime (coyly named “societal issues”) (50%), and economic challenges such as inflation and higher interest rates (47%). For the brokers who service consumers, the top three risks were the increasing cost of living (53%), tied with economic challenges (53%) and followed by unemployment (37%).

For businesses, the top three risks were crime (70%), a challenging economy (64%) and poor infrastructure (63%), while the brokers servicing them named the same risks in a different order, saying it was poor infrastructure (83%), a challenging economy (74%), and crime (68%).

What ties all this together is the question of economic growth. High crime, broken infrastructure and anti-growth policies all prevent the economy from growing. A stagnant economy means rising unemployment, receding incomes and a reduced ability of consumers to keep up with the rising cost of living. This in turn limits commercial opportunities for businesses while increasing their cost of doing business.