South Africa election: How Mandela’s once revered ANC lost its way

The Liberation Legacy and Early Gains

The ANC earned its moral authority through decades of resistance to apartheid, culminating in the 1994 democratic transition. In its first decade, the party delivered measurable progress: expanding basic services, introducing social grants that now support millions, and stabilising the economy after years of sanctions. Internationally, South Africa was celebrated for its peaceful transfer of power and the Truth and Reconciliation Commission, drawing foreign investment and re-establishing the country as a gateway to Africa.

These early achievements created high expectations for continued improvement in living standards. The ANC successfully integrated South Africa into the global economy while maintaining a commitment to redressing historical injustices through progressive policies. However, the complexity of transforming a deeply unequal society proved more challenging than anticipated, setting the stage for future frustrations as economic growth failed to keep pace with population growth and urbanization.

Service Collapse and Entrenched Inequality

Despite political freedom, economic inclusion has stalled. South Africa remains among the world's most unequal nations, with a Gini coefficient consistently near the top. Nearly half of 62 million people live below the poverty line, and unemployment exceeds 30%—among the highest globally. Daily life underscores the failure: rolling blackouts from Eskom's collapsing grid, sewage-contaminated water, uncollected rubbish, and millions housed in informal settlements. These service breakdowns fuel protests nationwide, especially among the 'born-free' generation with no memory of apartheid.

The persistence of these basic service failures has become particularly galling to younger South Africans who expected democracy to deliver tangible improvements in their quality of life. Community protests over electricity outages, water shortages, and uncollected waste have become regular features of South African political life, demonstrating the disconnect between the ANC's liberation legacy and its current governance capabilities. This gap between promise and performance has eroded trust across racial and generational lines.

State Capture and the Corrosion of Trust

The Jacob Zuma presidency (2009–2018) became synonymous with 'state capture'—the alleged diversion of state resources to private interests, notably the Gupta family. Investigations documented manipulated procurement, looted state-owned enterprises, and the disappearance of $15 million earmarked for removing asbestos from poor communities' homes. President Cyril Ramaphosa pledged reform after 2018 but has been constrained by factional resistance and his own farm-donation scandal, which triggered an impeachment vote he survived but which deepened public cynicism.

These corruption scandals represented more than isolated incidents; they revealed systemic weaknesses in oversight mechanisms that allowed private interests to influence public policy for personal gain. The perception that political connections mattered more than public service damaged the ANC's credibility irreparably. Even as Ramaphosa attempted to distance himself from this legacy, the lingering effects of state capture continued to undermine government effectiveness and deter investment, creating a vicious cycle of declining resources and growing public disillusionment.

A Fractured Movement

Since Mandela's 1999 departure, the ANC's 'broad church' has splintered. Thabo Mbeki was recalled in 2008; Zuma's ouster in 2018 prompted loyalists to regroup, now challenging Ramaphosa from within. Factional battles stall policy on land reform, mining, and labour—creating regulatory unpredictability for investors. The party that once commanded 70% of the vote now manages competing patronage networks rather than a unified national agenda.

This internal division has prevented the ANC from developing coherent long-term strategies to address South Africa's structural challenges. Instead of presenting a unified vision for economic transformation, the party has become preoccupied with managing internal power struggles. The resulting policy inconsistency has created uncertainty for businesses and further diminished public confidence in the ANC's ability to govern effectively, particularly as competing factions prioritize loyalty to leaders over national interests.

Coalition Threshold and Market Implications

Polls consistently place the ANC below 50%, though it remains the largest party. A lost majority would necessitate coalitions with rivals such as the Democratic Alliance, Economic Freedom Fighters, or uMkhonto weSizwe—Zuma's new vehicle. This introduces both accountability and risk: power-sharing may improve oversight but could also produce policy gridlock or populist concessions. For businesses, the critical variables are fiscal discipline, regulatory stability, and investment incentives in mining, energy, and finance—sectors where policy certainty drives capital allocation.

The prospect of coalition government marks a fundamental shift in South Africa's political landscape after three decades of ANC dominance. While power-sharing could introduce valuable checks and balances, it also raises concerns about decision-making efficiency and policy continuity. Investors will closely monitor how any potential coalition partners negotiate policy compromises, particularly on contentious issues like land reform, mining regulation, and labor relations, as these determinations will significantly influence South Africa's investment climate and economic trajectory.

What this means

South Africa's election is a stress test for post-liberation governance worldwide. The ANC's trajectory—from moral authority to embattled incumbent—illustrates how political legitimacy erodes when liberation dividends fail to materialise in daily life. For businesses and investors, the lesson is clear: institutional integrity and service delivery are not optional; they are prerequisites for sustainable markets. As coalition politics looms, stakeholders must assess whether power-sharing produces the accountability South Africa needs or the paralysis it fears. Either outcome will reshape the investment case for Africa's most industrialised economy and influence how other liberation-era parties navigate the transition from struggle to stewardship. In an ESG-conscious era, South Africa underscores that durable commerce depends on the strength of the institutions underpinning it. This moment represents not just a political calculation but a fundamental reckoning with whether the promises of 1994 can still be redeemed through democratic means, regardless of which party or coalition ultimately governs the nation.