The GNU’s dashed expectations

8 September 2025 — How do South Africans feel about the GNU? Who will win the fight for the ANC’s soul? Can SA benefit from Amsa’s downscaling? What message did China send with its latest military parade? Is a new global order emerging?

The GNU’s dashed expectations

As analysed in last week’s Risk Alert, the Government of National Unity’s (GNU) sugar high has run out. South Africans’ high initial expectations of growth and reform are steadily receding. Ipsos’ latest What Worries the World study finds 8 out of 10 South Africans surveyed feel the country is on the wrong track, compared with a global average of 63%. Just 20% of South Africans feel the country is going in the right direction, a number that registered as high as 40% between July and September 2024, immediately after the formation of the GNU.

A separate Khayabus Pulse of the People Ipsos study finds 42% of South Africans believe the GNU parties are working together “very or fairly well”, while 40% believe “the GNU has changed nothing in South Africa”. Despite increased unmet GNU expectations, 54% of voting-age South Africans believe different political parties should work together at local government level. The idea of cross-party collaboration remains popular, but the way the GNU is doing it increasingly less so.

Fighting for the soul of the ANC

In a further sign of African National Congress (ANC) decline, the party’s chairperson in the Eastern Cape, Oscar Mabuyane, noted at an election strategy meeting last week that about 300 of approximately 710 branches in the province were not in good standing. Unless this is rectified, it could affect the legitimacy of regional and provincial elective conferences — and ultimately, the ANC’s national elective conference in December 2027.

Mr Mabuyane also reported that the number of party members in the province had dipped below 100,000, while lamenting the state of the membership system. In the ANC’s 2024 annual report, the Eastern Cape’s number of ANC members in good standing was reported as being 101,285 as of December 2024. However, a different part of the same report states the membership in good standing as being 55,459, underscoring concerns about the validity of membership numbers.

In its provincial report on the Eastern Cape, the party’s annual report notes “diminishing public confidence in the ANC and the political system”, warns that “traditional supporters of the National Democratic Revolution are disengaging”, and argues that “rising discontent is exacerbated by economic stagnation, escalating violence, and internal factional vulnerabilities”.

All these charges can be laid at the door of the national ANC as well. That they are this pronounced in the Eastern Cape, a traditional ANC stronghold where the party obtained its second-highest provincial result in the 2024 election, where it has the third-highest number of members, and which is the ancestral home of ANC icons such as Nelson Mandela, Thabo Mbeki, Walter Sisulu and Oliver Tambo, will set the alarm bells ringing. Accordingly, Mr Mabuyane is quoted as saying: “We’re fighting for the soul of the ANC, for the survival of the movement, and the transformation of South Africa.”

ArcelorMittal shuts down Newcastle

ArcelorMittal South Africa (Amsa), the country’s only integrated steelmaker, has confirmed it will close its Newcastle long-steel operations, shedding 3,500 jobs and halving its steelmaking capacity.

The move follows years of declining output and failed state attempts to keep the plant afloat. The government has already channelled nearly R2 billion into Newcastle, including wage support, but with little effect. A buyer is being sought, though similar efforts came to naught when Amsa closed its Saldanha facility in 2020.

The underlying problem is global oversupply. World production outstrips demand by around 70 million tonnes annually. South Africa’s crude steel output fell 32% between 2014 and 2023, while local demand has been hit by stagnant investment and a moribund construction sector.

Pretoria has sought to shield Amsa through tariffs, blaming cheap Chinese imports. The policy has backfired, raising costs for hundreds of smaller steel fabricators that rely on affordable inputs and collectively support far more jobs than Amsa itself.

With Newcastle gone, South Africa will produce about 4.7 million tonnes of steel annually, placing it alongside mid-tier producers such as the United Kingdom and the United Arab Emirates (UAE). While some insist on the strategic value of domestic production, analysts note Newcastle produces nothing that cannot be sourced more cheaply abroad.

Industry insiders suggest the shutdown could open the way for tariff reductions, lowering costs for downstream firms. But logistical bottlenecks loom: rail is in disrepair, ports are under strain, and more freight will likely shift to already congested highways.

One sector unaffected is defence. Local ballistic steel comes entirely from imports, with the industry making little use of Amsa’s products. For non-defence fabricators, however, cheaper imports could improve competitiveness, much as the UAE built its construction boom almost entirely on imported steel.

The immediate pain will fall on Amsa’s workforce. The wider economy could benefit from imports and competition, if Pretoria is able to pivot from protecting legacy capacity to enabling growth across the industry. However, given the ANC’s well-established preference for state intervention in the economy, this is unlikely to happen. Instead, the government is likely to continue doubling down on subsidies, regulations and tariffs in a vain attempt to halt South Africa’s progressive deindustrialisation.

The global realignment gathers pace

The 25^th summit of the Shanghai Cooperation Organisation (SCO) in Tianjin, China produced pageantry that masked as much as it revealed. China, Russia and India — three powers often at odds — took the opportunity to project rare alignment. Chinese President Xi Jinping used the event to lend a sympathetic ear to world leaders who feel aggrieved by United States (US) President Donald Trump’s harsh treatment, all the while looking for any opportunity to integrate their economies into Chinese manufacturing, export, and supply chains.

Mr Xi announced a raft of new initiatives, including a surprise proposal for an SCO development bank. While such an institution would signal a departure from the SCO’s original security mandate, its prospects remain uncertain, given members’ long record of mutual distrust.

In a carefully staged moment, Indian Prime Minister Narendra Modi and Russian President Vladimir Putin joined Mr Xi in an informal huddle, smiling for cameras and speaking of “multipolarity” and “shared interests.” Each also held bilateral meetings: Mr Xi and Mr Modi described their countries as “development partners, not rivals,” while Mr Putin and Mr Xi reaffirmed their close personal ties. Messrs Modi and Putin likewise exchanged warm words about a “shoulder to shoulder” partnership.

These gestures are designed to signal resilience in the face of mounting Western pressure, while cementing China’s role as leader of the aggrieved. With the US escalating tariffs on India, sustaining its trade war with China and tightening sanctions on Russia, the SCO’s leading members sought to present themselves as an alternative pole in world affairs. Mr Putin went so far as to suggest the SCO could become the vanguard of a “more just global governance system.”

Yet for all the symbolism, the summit did not produce much substance. China and India remain deeply divided over their border dispute, and India is wary of any institution that looks like a Chinese financial arm. Despite the photo ops and flowery language, decades of deep-seated mutual distrust and conflict between these two aspiring global powers — engaged in dancing a “dragon-elephant tango”, as Chinese Vice President Han Zheng put it — are unlikely to be cured in the short term.

A gathering of rogues

The SCO summit was followed by a Victory Day Parade held in Beijing on 3 September. Marking the 80^th anniversary of “the Chinese people’s war of resistance against Japanese aggression and the world anti-fascist war”, the parade showcased the latest in Chinese military hardware and was attended by the leaders of four nations Washington describes as the “axis of upheaval”: North Korea, Iran, Russia and China itself.

They were joined by a rogue’s gallery including the president of Belarus, Aleksandr Lukashenko; the military leader of Myanmar, Senior General Min Aung Hlaing; the president of Cuba, Miguel Diaz-Canel; and the president of Zimbabwe, Emmerson Mnangagwa. In hosting the economic summit and military parade back-to-back, China aimed to display its influence in its soft and hard power capacities, while demonstrating its acceptance of authoritarianism ranging to totalitarianism.

For South African companies, the key risk is that deepening Sino-Russo-Indian alignment hardens the divide in global trade and finance. This could accelerate decoupling from Western systems, with ripple effects for market access, capital flows and supply chains, not to mention democracy, human rights and civil liberties.