South Africa’s governing African National Congress is facing the steepest electoral bill in its history, and the cost is measured in votes and market confidence alike. In the country’s significant local government elections, the party that has dominated the political economy since the end of apartheid in 1994 secured under 31% of the vote, a result its own leaders have described as “catastrophic.” For investors, operators and market watchers, the question is less about symbolism than about what a weakened dominant party means for governance, service delivery and the business environment in the years ahead.
The financial and economic signals behind the result are hard to ignore. Voters cited skyrocketing unemployment, poor service delivery, local governance failures and years of graft and corruption, sometimes at the highest levels of government. Tasnim Essop, a researcher at the Society, Work and Politics Institute (SWOP) at the University of the Witwatersrand in Johannesburg, told DW that basic municipal economics sit at the heart of the shift. “You’re talking about issues like water, electricity, housing, public services at the basic municipal level. And those kinds of things have been key issues. And … research has shown that unemployment is also a big part of what drives people to vote in certain ways,” she said. In her view, the party now owes itself serious introspection and must confront difficult questions about governance, leadership and accountability.
Essop also stressed that the outcome did not happen overnight. It reflects a long erosion of public confidence in the erstwhile ruling party, an erosion with direct consequences for the operating environment that businesses and investors depend on. DW correspondent Dianne Hawker-Kalubi, who reported from polling stations during the election, heard the same message on the ground, with many voters expressing “a lot of frustration, a lot of concern about basic services not being delivered” for years.
The frustration is rooted in household economics. Mokhiri Phooko, a Cape Town resident, told Reuters that “people are losing hope” across the country after more than three years of a political landscape still dominated by late President Nelson Mandela’s party. “You promised us jobs, why [are] you not keeping up the end of your bargain right,” she said, adding that “(t)he unemployment rate went up drastically” in the past few years. For a party whose political capital was built on a liberation promise, that shortfall in delivery is now the central liability on its balance sheet.
The ANC has acknowledged the problem. In a statement, the party announced that its National Executive Committee would convene a special meeting to deal with the “serious political responsibility to listen to the people, confront its shortcomings and provide leadership.” At the same time, it must prepare a framework for upcoming coalition negotiations, many times involving some of its biggest rivals, as was the case after the 2024 general elections. Coalition bargaining of this kind shapes policy direction and, by extension, the predictability that markets and operators price in.
What changed: the results point to a broader redistribution of political support across multiple parties rather than concentration behind a single dominant force. Nationally, the ANC remained the country’s largest party, but opposition parties made significant gains. The Democratic Alliance (DA) strengthened its position across several major urban centers, the commercial hubs where municipal performance matters most to business. Meanwhile, the uMkhonto weSizwe (MK) party, launched by former President Jacob Zuma in late 2023, performed strongly in the KwaZulu-Natal province despite its recent entry into politics. At the local level, smaller civic organizations and community-based movements also recorded notable successes.
Essop describes the trend as growing “vote fluidity,” with voters increasingly willing to move support between parties instead of remaining loyal to a single political organization. Some observers have linked this drift to South Africans moving beyond liberation-era loyalties, but she is cautious. “I would be cautious to say that liberation politics are dead and gone,” she said, noting that many parties continue to draw their legitimacy and support from the country’s liberation history, even if they no longer operate under the ANC banner. In her reading, the shift is not a wholesale rejection of the liberation narrative but a growing demand for effective governance and leadership. Further detail on the election and its aftermath is available via DW at https://www.dw.com/en/after-suffering-its-worst-election-result-whats-next-for-the-anc-and-for-south-africa/a-79929902.
President Cyril Ramaphosa framed the test in performance terms. The results, he said, challenge not just his party but all political parties to come together and perform better for citizens. “Those who have been elected to councils now need to prove themselves worthy of the trust placed in them by the South African people,” he said in a statement.
The ANC still remains South Africa’s largest political party, but its latest setback at the polls underscores how much the landscape has changed since apartheid ended. The era of undisputed ANC loyalty and dominance appears to be over. Voters show a greater willingness to back alternative parties and punish those they believe have fallen short, and whether the party can reverse the decline will depend largely on how convincingly it delivers improved public services and effective change, the very currency on which its political and economic standing now rests.