The Captive Democracy of South Africa’s Coalition Governance

South Africa

Photo illustration by Dami Mojid / THE REPUBLIC. Ref: DEMOCRATIC ALLIANCE / FLICKR.

THE MINISTRY OF WORLD AFFAIRS

The Captive Democracy of South Africa’s Coalition Governance

Coalition governance offers potential for enhancing democracy in theory; but the dominance of party-political funding and influence of elite and commercial interests from the minerals-energy-finance sectors risk exacerbating political and economic inequalities in South Africa.
South Africa

Photo illustration by Dami Mojid / THE REPUBLIC. Ref: DEMOCRATIC ALLIANCE / FLICKR.

THE MINISTRY OF WORLD AFFAIRS

The Captive Democracy of South Africa’s Coalition Governance

Coalition governance offers potential for enhancing democracy in theory; but the dominance of party-political funding and influence of elite and commercial interests from the minerals-energy-finance sectors risk exacerbating political and economic inequalities in South Africa.

In 2024, South Africa’s young democracy reached a significant milestone. For the first time since the end of apartheid, the African National Congress (ANC), which has held a dominant position in national, provincial and local politics since 1994, failed to secure an outright majority in the national elections, falling short by a notable margin. This outcome reflects a growing shift in public sentiment away from the ANC that began after the 2016 local elections following decades of ANC governance, during which the party—initially celebrated as the liberator of the oppressed and the architect of a democratic South Africa—became enmired in sleaze and corruption.

The ANC’s failure to achieve a majority resulted in the formation of a coalition government, deemed a Government of National Unity (GNU). This coalition comprises ten political parties—substantial and minute—with differing ideologies and priorities, including the Democratic Alliance (DA), a long-time adversary of the ANC. This new political arrangement presents both opportunities and challenges. On the one hand, it could herald a new era of inclusivity and broader representation for various social and political groups that have previously felt marginalized. On the other hand, there is concern that this shift may merely serve to reconfigure existing mechanisms of elite capture, as established political players continue to wield disproportionate influence despite the apparent diversification of government—and despite the voting behaviour of citizens which signified a stark departure from continuously voting for the ANC.

Like any other coalition, the GNU’s ability to govern effectively will be tested by competing interests and the need for compromise on core policy issues, ranging from economic recovery and job creation to social equity and service delivery. As South Africa navigates this critical juncture, the reality of its political ecosystem—marked by corruption scandals, socioeconomic challenges and growing public disillusionment—will play a crucial role in shaping the future of its democracy. However, what should also be carefully observed over the coming years is whether this new political landscape will lead to genuine reform and revitalization or reinforce existing power dynamics under a different guise—one informed by elite capture in the form of political funding.

Behind the scenes, South Africa’s political economy remains gripped by an entrenched system of extraction and exclusion, upheld by the shadowy influence of the Minerals Energy Financial Complex (MEFC). This nexus of mining, energy and finance elites has dictated the nation’s economic trajectory for decades under apartheid and democracy. While coalition politics may have disrupted single-party dominance, it has also ushered in fresh challenges in creating an equitable society.

A CLOSED-ORDERED ECONOMY IN AN OPEN DEMOCRACY

At its core, South Africa’s economic system operates on a dual logic: outwardly democratic but inwardly extractive. Inclusive political institutions—characterized by free elections and a progressive bill of rights—have not been matched by inclusive economic systems. Instead, concentrated ownership within the MEFC has ensured that the country’s vast wealth benefits a narrow elite, leaving most South Africans trapped in poverty and unemployment.

The MEFC, whose roots can be found in South Africa’s colonial era, emerged as a survival mechanism for elites during the tail end of the apartheid era, particularly during the regime’s economic crisis in the 1980s. Under pressure from collapsing gold prices, sanctions and disinvestment, apartheid’s architects sought to stabilize the economy by consolidating power within a handful of conglomerates. By the late 1980s, six mining and financial entities controlled 80 per cent of the Johannesburg Stock Exchange, namely: the Anglo American Corporation, Sanlam, Stanbic/Liberty Life, Rembrandt/Remgro/Volkskas, SA Mutual/Old Mutual, and Anglovaal. Though apartheid ended, the economic structures it fortified remained largely intact. 

Post-apartheid reforms made strides in creating political inclusion but failed to dismantle the entrenched wealth of mining barons and financiers. Instead, policies like Black Economic Empowerment (BEE) created new beneficiaries without redistributing anything significant to the masses. As a result, wealth inequality in South Africa remains the highest in the world, with a Gini co-efficient of 0.67, a reality that coalition governance now risks perpetuating. 

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THE RISE OF COALITION POLITICS AND ELITE INFLUENCE

The ANC’s electoral dominance began to visibly wane after the 2016 municipal elections when coalition governments took hold in key cities like Johannesburg and Tshwane. The 2019 national elections saw the ANC’s vote share drop below 60 per cent for the first time (to 57.5 per cent). By the 2021 local government elections, the ANC was already below the 50 per cent threshold (at 45.6 per cent). In 2024, voters delivered the ultimate verdict: the ANC fell far short of a majority, coming in at 40.2 per cent, requiring it to partner with opposition parties to govern.

Coalition politics often brings hope for greater accountability and inclusivity. In theory, multiple parties working together should reduce corruption and ensure that no single entity dominates the political landscape. In practice, however, coalitions in South Africa have often been fragile and transactional, prioritizing political survival over transformative policies as they mostly function through an office-seeking—rather than ideological or policy oriented—rationale. With a weakened ANC in sight, the role of money in politics and the formulation of coalitions became increasingly influential in the lead-up to the 2024 elections as parties and the economic elite began to engage in what can be best described as ‘electoral fantasy league’, with economic elites jockeying for influence over and access to the executive arm of the country without the need to engage with a dominant political entity—or voters.

As South Africa’s political elite adapted to the rise of coalition governments in major metropolitan areas following the 2016 local elections, economic elites began influencing electoral politics through private funding. Before the 2021 municipal elections, private political funding was unregulated. Public funding, however, was governed by Section 236 of the Constitution, which required funds to be allocated 90 per cent proportionally and 10 per cent equitably through the Public Funding of Represented Political Parties Act of 1997. This act outlines the distribution of public money to political parties in the National Assembly and provincial legislatures and mandates annual audits, with fund management handled by the chief electoral officer.

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In 2017, the civil society organization, My Vote Counts, challenged the secrecy of private political funding. The Western Cape High Court ruled that the Promotion of Access to Information Act of 2000 was unconstitutional for not requiring disclosure of such funding. This decision was upheld by the Constitutional Court in 2018, leading to the enactment of the Promotion of Access to Information Amendment Act in 2021. This law mandates the recording and disclosure of private funding for political parties and independent candidates if it exceeds R100,000 or if provided in-kind. It should be noted that the presidency has made subsequent efforts to remove this transparency provision currently being challenged in court by My Vote Counts. 

The transparency over funding meant that the 2024 elections could reveal the extent of elite involvement in South Africa’s political process. Private political donations operated covertly for decades, obscuring the financial relationships between businesses and political parties. The implementation of the Party Funding Act in 2021 introduced transparency requirements, exposing how economic elites shape electoral outcomes. The DA, South Africa’s largest opposition party, reportedly received R275 million in donations for the 2024 election cycle. Much of this funding came from wealthy individuals, including venture capitalist Martin Moshal, the Oppenheimer family and billionaire Michiel le Roux through his investment vehicle, Fynbos Kapitaal. The ANC, despite its declining influence, raised R191 million, primarily sourced from mining-related trusts and entities that function as investment vehicles for the party, such as Chancellor House, Batho Batho Trust and United Manganese of Kalahari—the latter is alleged to have ties with Russian oligarchs. 

Of particular interest is how economic elites have distributed their financial support across multiple political parties during this election cycle, either through individual contributions or investment vehicles, to hedge their support against the ANC (or at least a dominant ANC). Notably, Moshal, who historically primarily funded the DA, has also been shown to fund several parties with historical links to the DA, such as Build One South Africa, led by former DA leader Mmusi Maimane, who received R15.5 million, and ActionSA, led by former DA Johannesburg mayor, Herman Mashaba, which received R37 million. The Oppenheimer family, known for historically funding political organizations in South Africa, also contributed R191 million to both established and newer political parties during the last election cycle. 

While various individuals and entities provided substantial financial support to several political parties, 14 individuals and entities accounted for 80 per cent of all political funding between 2021 and 2024. Moshal made the largest individual contribution of R103 million, and Michael Le Roux, through his two investment vehicles, contributed a total of R100 million. By spreading their largesse and hedging their bets, the goal was to stop anything like a dominant ANC victory. Individuals in elite positions associated with the MEFC or who have accumulated their wealth through activities linked to the MEFC contributed significantly more financial support to political parties than those from other sectors. This funding pattern underscores how South Africa’s political landscape remains captive to elite interests. Mining magnates and financiers ensure they remain influential regardless of the election outcome by diversifying their financial support across multiple parties and ensuring no single party can dominate. In essence, money—not ideology—dictates the deals made in coalition politics. 

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A MOMENT OF RECKONING

Without decisive action, South Africa risks perpetuating another cycle of elite dominance. While coalition politics may seem promising in theory, it could also serve to entrench existing power dynamics, heightening public disillusionment with democracy and creating a fertile ground for populist movements and social unrest. The warning signs are already evident. Youth unemployment exceeds 35 per cent, and inequality and poverty remain endemic to the country’s economic logic. Although initiatives like Business for South Africa may stabilize specific sectors, they do little to address the structural barriers that keep most South Africans in poverty. Efficiency—not redistribution—is their concern.

Yet coalition politics also present an opportunity to disrupt the status quo; although this can only happen if leaders are willing to confront the underlying structures that perpetuate inequality. Structural reform is essential to shift South Africa from a deals-based economy—where elites negotiate power behind closed doors—to a rules-based system that prioritizes fairness and transparency. South Africa’s 2024 elections have set the stage for a critical reckoning. Coalition politics offers an opportunity to redefine the country’s political and economic trajectory, but only if leaders are willing to confront the entrenched systems that perpetuate inequality. Limiting the influence of business elites must be central to this effort. By breaking the MEFC’s stranglehold on the economy and curbing the political dominance of wealthy donors, South Africa can pave the way for a more inclusive democracy.

This moment demands bold action. It requires political leaders to prioritize the needs of the many over the interests of the few, business leaders to embrace their responsibility to society and citizens to hold both groups accountable. South Africa today stands at a crossroads. The choices in this coalition era will determine whether its democracy evolves into redistributive inclusivity or remains captive to its past; exposing the fractures in the nation’s political economy, but also offering a chance to redefine its trajectory. Whether this period ushers in a new era of democratic accountability or entrenches the power of elites depends on today’s choices. To succeed, South Africa must resist the allure of short-term fixes and instead embrace bold, systemic reforms. This requires courage from political leaders, collaboration across sectors and a commitment to building a society that works for all its citizens—not just the privileged few⎈

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DAVID EVERATT

is a professor at the Wits School of Governance.