Coalition agreement would likely see ANC give EFF the finance portfolio - IRR
The Institute of Race Relations believes any coalition agreement would likely see the ANC agree to the EFF's demand for Floyd Shivambu to be appointed finance minister.
The Institute’s Terence Corrigan briefed the media on Monday morning on a possible coalition between the two parties after Wednesday’s general elections.
The EFF also stated that expropriation of land without compensation and free education as their non-negotiable demands.
Corrigan said this could see the economy taking a massive hit.
"Concerns certainly exist about the fiscal direction, but it is at least familiar to observers and to the business community.
“The ANC, having been in government long enough to understand the implications, would also be keen to avert investor panic and would insist on retaining the finance portfolio, whose incumbent would be selected as a safe pair of hands. This has been a longstanding practice and has, in the past, provided a considerable degree of reassurance.
“The EFF has stated that a coalition with the ANC would rest on three non-negotiable policy items: expropriation of land without compensation, free education (to which the government has already made considerable commitments), and nationalisation of the mines. It can be assumed that the ANC would have made a public commitment to carrying them out.
“The very accession of a government with this political character can be expected to undermine whatever reassurance even a respected finance minister might offer," said Corrigan.
He believes that South Africa would likely experience heightened capital flight and emigration, along with the loss of economic resources that this represents.
"In policy terms, the early period of the government would likely be characterised by a combination of investigations into the interventionist policies already proposed by both the ANC and EFF – introducing prescribed assets is an obvious example.
“Where these are already well advanced or parsed into legislation, their implementation will begin in earnest. The National Health Insurance and expanded ‘free’ education would probably be the flagship initiatives here," said Corrigan.
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