A strong win for South African President Cyril Ramaphosa’s African National Congress in next week’s election would trigger a rally in asset prices, according to Colin Coleman, head of sub-Saharan Africa at Goldman Sachs Group.
“We need to get out of this election a strong mandate for structural reforms,” Coleman said in an interview on Bloomberg Television on Wednesday. Support of 60% would give Ramaphosa the “political space to implement his modernisation agenda, including trying to effectively get the state-owned enterprises and a raft of economic reforms firmly in place.”
With South Africans scheduled to vote on May 8, opinion polls are suggesting the ruling ANC will win enough votes to remain in power. The margin of victory, however, is key to determining if Ramaphosa is able to deliver on pledges to revive flagging economic growth, bring rampant corruption under control and address a 27% unemployment rate.
Estimates of support for the ANC range from 51% to 61%, with the opposition Democratic Alliance garnering between 19% and 24%, according to surveys by polling firms and research institutes. Julius Malema’s Economic Freedom Fighters, currently the third-largest party, is seeing support of 11% to 14%, the polls show.
Were the ANC to reach the 60%-mark, “then the market will be very bullish,” Coleman said. Anything below that level would limit Ramaphosa’s ability to make the changes he wants, he said.
© 2019 Bloomberg L.P