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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Welcome to voter Noomics, where politics and markets collide. The

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Speaker 2: polls have opened in South Africa's general election, which could

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Speaker 2: be the most consequential since the end of apartheid thirty

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Speaker 2: years ago.

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Speaker 3: The ANC has been at the forefront of South African

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Speaker 3: politics since Nelson Mandela's release from prison. He was elected

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Speaker 3: president his party has been in power ever since, but

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Speaker 3: the current President, Sarah Ramaposa, faces levels of discontent not

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Speaker 3: seen by any of his predecessors.

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Speaker 4: The ANC Mandela's party potentially could risk losing their parliamentary majority.

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Speaker 4: There are lots of other opposition parties fifty one buying

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Speaker 4: for people's votes, and the people who've spoken to today

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Speaker 4: are very aware of the power of their vote. They've

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Speaker 4: seen the change it's brought in the past, and they're

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Speaker 4: hoping it can help with soaring unemployment, high inequality, and

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Speaker 4: the crime that has ridden their neighborhood and the country.

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Speaker 2: This year. Voters around the world have the ability to

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Speaker 2: affect markets, countries and economies like never before, and we've

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Speaker 2: created this series to help you make sense of it all.

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Speaker 2: I'm Adream Woodbridge. My regular co hosts alegra Stratton and

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Speaker 2: Severy Flanders are out this week, leaving me carrying the can.

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Speaker 2: So we're going to do something a little different. We're

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Speaker 2: going to focus this episode on the very significant, incredibly

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Speaker 2: significant election taking place in South Africa. As you've heard

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Speaker 2: at the top of the show on Wednesday, votes were cast.

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Speaker 2: Over the weekend, we will get the results and then

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Speaker 2: on Monday we'll have a full voter nomics with the

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Speaker 2: whole crew examining election results and also featuring an interview

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Speaker 2: with Dhalip Singh, former at Federal Reserve Economists now Deputy

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Speaker 2: Nationals Curate Advisor at the White House, who, among other things,

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Speaker 2: masterminded sanctions against Russia. But for this episode, I've invited

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Speaker 2: Jacqueline Simmons, who is our regional editorial lead, to join

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Speaker 2: me in the London studio.

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Speaker 5: Welcome Jackie, Hi, Adrian.

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Speaker 2: Jackie, give us a sense of what you're you're you're

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Speaker 2: you're thinking about, Johanna, what's happening in Johannesburg at the moment.

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Speaker 5: I recently was in South Africa, first in Johannesburg and

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Speaker 5: then Cape Town. But one of the things that stood

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Speaker 5: as we convened a dinner with business leaders of various

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Speaker 5: stripes in Johannesburg, and I was really struck by how

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Speaker 5: sanguine most of them were about the election outcome and

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Speaker 5: the idea of a left leaning eff party somehow coming

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Speaker 5: into government with the an C if it drops below

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Speaker 5: its majority, you know, a party that wants to nationalize

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Speaker 5: assets like lands and mines. It didn't really fase them.

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Speaker 5: They didn't seem to think it would become a reality, which,

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Speaker 5: by the way, very much tracks with what we're seeing

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Speaker 5: in the markets and some of the pulling leading into

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Speaker 5: the vote. But at the same time, they expressed utter

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Speaker 5: frustration with the status quo, so you know, frustration with

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Speaker 5: blackouts or load shedding as they call it, their shoddy infrastructure,

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Speaker 5: bad roads, crime, I mean, it's a really long list.

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Speaker 5: So you have this dual sentiment with on the one hand,

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Speaker 5: it's going to be okay, but on the other one,

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Speaker 5: we're really fed up. So this kind of duality stood

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Speaker 5: out to me most.

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Speaker 2: So is that basically is the basic sentiment there that

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Speaker 2: things can't get any worse and they might get a

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Speaker 2: bit better.

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Speaker 5: I think it depends on who you ask. I have

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Speaker 5: a very good contact in Cape Town, someone who works

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Speaker 5: in architectural modeling. White votes DA will vote DA, and

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Speaker 5: he says he's going to do that because the DA

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Speaker 5: has a proven track record running a province efficiently. But

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Speaker 5: at the same time, you talk to his black staff,

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Speaker 5: both at his house and in his business. Now they're

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Speaker 5: not going to vote. And I did speak to one

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Speaker 5: of them, and he was clear to me that he

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Speaker 5: has zero interest in politics. He does not think that

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Speaker 5: life is going to change marketly whether he votes or not.

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Speaker 5: And furthermore, I think some of the staff, and I

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Speaker 5: think this is reflective of our reporting, they don't feel that, yeah,

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Speaker 5: anything is going to get better for them, that the

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Speaker 5: conditions have just if anything worsened. They don't see the point.

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Speaker 2: Now, of course, Jackie, as you know, one of the

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Speaker 2: abuses of Bloomberg is that we have brilliant people in

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Speaker 2: all these places that we're reporting from. So let's actually

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Speaker 2: go over to Johannesburg where Yvonne Mahanngo from our Bloomberg

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Speaker 2: Economics team will join us. Yvonne, Hello, Hi, Now this

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Speaker 2: is a watershed election for South Africa, Is that right?

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Speaker 6: It is?

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Speaker 1: Yes, It's the first time in three decades that the

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Speaker 1: African National Congress may not get an outright majority, which

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Speaker 1: implies that they may have to partner with a smaller

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Speaker 1: political party in order to govern.

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Speaker 2: And why, I mean, why are they losing this majority.

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Speaker 2: I can't think of South Africa without being run by

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Speaker 2: the ANC.

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Speaker 1: It's a good point. I mean, there've been office for

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Speaker 1: three decades. But if you follow the trajectory of the economy,

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Speaker 1: particularly over the past two decades, and in particular an

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Speaker 1: employment rate, you can understand why South Africans are frustrated.

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Speaker 1: Unemployment has increased from around twenty three percent two decades

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Speaker 1: ago to thirty two percent today. We have a power

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Speaker 1: crisis that's been in place for sixteen years but in

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Speaker 1: recent years has curiorated such that you only gets electricty

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Speaker 1: four half of a day. South Africans are frustrated in

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Speaker 1: terms of service delivery and are seeking alternatives from the ANC.

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Speaker 5: If I have a question just about turnout. So in

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Speaker 5: nineteen ninety four, when Mandela was presenting it, turnout was

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Speaker 5: eighty five percent. In twenty nineteen the year Ramoposa was voted,

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Speaker 5: and turnout was forty seven percent. So we've written the

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Speaker 5: ANC has two things working in its favor. Apathy, and

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Speaker 5: a splintered opposition. Why so much apathy apathy, I guess.

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Speaker 1: Is the fact that there's historically been this link to

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Speaker 1: this what we consider a liberation party, the party that

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Speaker 1: took South Africa out of a party. So you've got

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Speaker 1: that generation that struggles to think they could vote for

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Speaker 1: anyone else. However, as we move away from nineteen ninety four,

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Speaker 1: there's a young generation that doesn't have any link to

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Speaker 1: the past, and as we side, we're actually expecting to

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Speaker 1: see an increase in turnout at this particular election from

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Speaker 1: reports and just hearing just listening to the radio, turnout

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Speaker 1: seems to be pretty strong, suggesting that it's going to

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Speaker 1: be quite different from twenty nineteen.

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Speaker 5: Interesting, and just to follow on that, how much of

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Speaker 5: that turnout is dictated not so much by racial lines,

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Speaker 5: but by the haves and they have not.

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Speaker 1: The indications just by listening to word of mouth feedback

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Speaker 1: and those falling into radio stations is turnout has been

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Speaker 1: pretty strong in urban areas, so I guess that would

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Speaker 1: be where you'd see more of a mix of races.

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Speaker 1: Apathy does still exist, particularly in the townships, which is

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Speaker 1: a lower income area, but I'd imagine in rural areas

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Speaker 1: where people find it important though a civic duty to vote,

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Speaker 1: that turnout would still be pretty solid. And I highlight

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Speaker 1: the rural areas because today that is where the ruling

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Speaker 1: parties support is coming from. Those who are most frustrated

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Speaker 1: are those in urban areas, and the polling that we've

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Speaker 1: been seeing has actually been predominantly from urban areas. So

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Speaker 1: if you do see a surprise in terms of the

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Speaker 1: performance of the ANC, that will most likely be because

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Speaker 1: of the turnout from the rural areas.

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Speaker 2: And Yvonne, can you give us a sense of what

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Speaker 2: the rival parties are.

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Speaker 1: The second biggest party is a Democratic Alliance. They're considered

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Speaker 1: the pro business Party. That's the party that investors would

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Speaker 1: love the NC to form a coalition with if the

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Speaker 1: NC lost to their majority vote. And that party is

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Speaker 1: firm in terms of restoring fiscal health to the country.

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Speaker 1: They look at tax reform in order to make it

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Speaker 1: more friendly for business, and they will do away with

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Speaker 1: affirmative action because they feel it's been taken advantage of

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Speaker 1: if I can call it that, or corruption has gone

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Speaker 1: into it.

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Speaker 6: So that's a democratic alliance.

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Speaker 1: It's also considered the White Party, so that's why in

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Speaker 1: some cases they've struggled in order to get beyond the

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Speaker 1: twenty percent of that they've peaked at. The other big party,

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Speaker 1: the third biggest one is the Economic Freedom Fighters. That's

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Speaker 1: a leftist party that that causes investors to get pretty

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Speaker 1: nervous because of their.

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Speaker 6: Talk of nationalization. So that's led by Julius Malemma.

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Speaker 1: That's a party that could be considered for a coalition,

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Speaker 1: particularly if the NC does really badly, like less than.

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Speaker 6: Forty percent of the vote. Those are the two main parties,

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Speaker 6: those are the ones to watch for.

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Speaker 2: So that points to two very very different futures. One

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Speaker 2: of the business oriented future and another is a populist

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Speaker 2: sort of future.

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Speaker 1: See but let me also point out that if the

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Speaker 1: ANC's less than majority vote is around forty five percent,

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Speaker 1: they simply have to partner with a smaller party. In

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Speaker 1: this case, then Cutter Freedom Party is considered to be

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Speaker 1: the natural fit. It's a party that's dominant in Hota,

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Speaker 1: which is Jacobsumer's.

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Speaker 6: Province, and if they partnered with the IFP, then.

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Speaker 1: You'd see policy continuity because of very similar in terms

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Speaker 1: of policy trajectory.

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Speaker 5: So financial markets have been optimistic. We did a survey

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Speaker 5: of twenty six emerging market investors, where most were overweight

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Speaker 5: or neutral in South Africa, preferring it as an investment

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Speaker 5: to Egypt or Nigeria. When investors are watching the projections

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Speaker 5: that we'll get, at what point do you think they'll

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Speaker 5: start to get either very nervous or very excited.

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Speaker 6: So the first thing.

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Speaker 1: Is whatever I wants to see is whether the answer

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Speaker 1: will get an outdright majority or not.

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Speaker 6: So that's the first big question.

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Speaker 1: If they don't get the majority, I think you've got

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Speaker 1: to see, well, the rand will show that displeasure or

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Speaker 1: the uncertainty. Secondly, so I do you expect it to

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Speaker 1: come off? If we see the ANCER get less than

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Speaker 1: fifty percent, then everyone will be in a weight and

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Speaker 1: see mode of regards to what sort.

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Speaker 6: Of coalition will be formed.

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Speaker 1: The authorities have two weeks fourteen days and which to

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Speaker 1: form a government, so that period to be watched very

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Speaker 1: closely to see what sort of horse trade is going on,

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Speaker 1: which parties are most likely to partner the ANC, and

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Speaker 1: the outcome of that, of course would also have its

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Speaker 1: own impact on the market. But the first big question

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Speaker 1: is will the ANC get an outright majority.

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Speaker 5: The two issues that investors are most concerned about. Again,

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Speaker 5: according to our survey, it was curbing crime and easing debt.

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Speaker 5: Which scenario or outcome do you think might best address

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Speaker 5: those two pressing issues that investors are most concerned about.

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Speaker 1: So on the dead front, the Democratic Alliance are the

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Speaker 1: party that seems to be more focused in terms of

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Speaker 1: trying to ensure that phiscal consolidation is pursued and that

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Speaker 1: debt is stabilized sooner rather than later. With regards to crime,

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Speaker 1: I can't say there's a party out there that that

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Speaker 1: comes to mind in terms of being more effectable to

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Speaker 1: have a more effective approach. All parties and their manifestos

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Speaker 1: have pointed out crime as a concern and something that

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Speaker 1: they want to stamp out.

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Speaker 6: But other than that, I.

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Speaker 1: Think they all be relatively equal in terms of how

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Speaker 1: they approach the issue of crime in the country.

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Speaker 5: Yeah, and one thing that confuses me a little bit

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Speaker 5: is that the rand and bonds rebounded and the leader

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Speaker 5: to the election on expectation that there won't be major

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Speaker 5: changes to economic policy. So that kind of makes me

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Speaker 5: wonder what does this realistically mean for reform?

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Speaker 1: The think too highlight is amongst the main political parties,

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Speaker 1: the big parties, particularly ones ends you could pick us

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Speaker 1: coalition partners. Their policies are broadly similar and that's why

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Speaker 1: you're seeing investors be relatively comfortable with the South Africa

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Speaker 1: story with regard to reforms.

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Speaker 6: If anything, what we're hoping.

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Speaker 1: Is that, and I'm speaking as a citizen, is that

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Speaker 1: you get a coalition partner that will help expedite existing reforms.

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Speaker 1: So the current policy and reform path I think generally

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Speaker 1: South Africans are happy with, but the concern is that

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Speaker 1: it's been slow and the economy are stagnated, and we

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Speaker 1: want to see greater impetus going forward with regards to reforms.

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Speaker 2: How do you manage elections in such a big, diverse country,

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Speaker 2: with a large number of people who are not particularly literate,

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Speaker 2: and also with the threat of interference from disruptive forces

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Speaker 2: in the election, or from deception or from false information.

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Speaker 2: Is it a sort of a huge organizational challenge.

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Speaker 1: I must say the Independent Electoral Commission which runs the election,

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Speaker 1: has been pretty efficient in terms of civic education, ensuring

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Speaker 1: that the people that are running the voting stations are

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Speaker 1: when informed, are able to explain what needs to be

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Speaker 1: done to those that need assistant providing special votes to

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Speaker 1: the elderly or those who are disabled. So we have

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Speaker 1: a very strong machine in terms of the Independent Electoral

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Speaker 1: Commission that's able to ensure that elections are well managed

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Speaker 1: even in the deepest of rural areas.

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Speaker 6: Of the country.

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Speaker 2: Thank you so much. That's fascinating.

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Speaker 6: Thank you.

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Speaker 2: We're in the West. We're very myopic about these things.

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Speaker 2: I mean, we're in Britain. We have an election, so

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Speaker 2: we're focused on that. Everybody's always thinking about what's going

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Speaker 2: on in the United States and the craziness is going

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Speaker 2: on there. But I think it's fascinating to listen what's

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Speaker 2: happening in South Africa, a huge and important emerging market.

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Speaker 2: But it's fascinating but also a bit depressing, I think

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Speaker 2: because I think in the nineteen nineties, this was the

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Speaker 2: great hope of the world, this peaceful transition. The NC

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Speaker 2: was this new party that wanted to take the country forward,

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Speaker 2: and a lot of what you heard is quite depressing.

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Speaker 2: It's about crime, it's about energy failures, it's about an

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Speaker 2: uncertain it's about huge frustration in the population. This is

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Speaker 2: not the happy future that we were hoping for.

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Speaker 5: I agree with that. I also though, see a little

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Speaker 5: bit from the perspective of glass half full. I mean,

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Speaker 5: this is a continent that is the fastest growing continent

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Speaker 5: in the world, and I do think having been on

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Speaker 5: the ground there, you know, several times, now, you do

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Speaker 5: see of this drive for change, this hunger for change,

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Speaker 5: this entrepreneurial spirit that very much exists there, not just

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Speaker 5: in South Africa, but across the continent. I think that

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Speaker 5: you're looking at a new air of sorts. You saw

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Speaker 5: what happened last year with the enlarged bricks that place

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Speaker 5: in South Africa. You also will see the G twenty

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Speaker 5: be hosted for the first time in Africa. In South

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Speaker 5: Africa specifically, you see what's happening, you know, with respect

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Speaker 5: to sort of capital flows. You talked about everything being

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Speaker 5: sort of myopically concentrated on the West and then global North.

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Speaker 5: But I do think that the story is increasingly shifting

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Speaker 5: toward the so called global South, and South Africa is

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Speaker 5: very much part of that story. So I do think

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Speaker 5: it's sort of in the interest of how we and

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Speaker 5: investors and citizens you know, think about, you know, the

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Speaker 5: change that could come. So yes, it's depressing, but on

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Speaker 5: the other hand, I do think there is a great opportunity,

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Speaker 5: and I think we have to look at it a

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Speaker 5: little bit about, you know, what we can do baby

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Speaker 5: steps wise, and what this election represents in that optic.

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Speaker 2: And of course we're seeing the ANC possibly losing its

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Speaker 2: monopoly of power and that could go. I would have

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Speaker 2: thought in two ways. It could be a good thing

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Speaker 2: in which you get real competition for power. No particular

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Speaker 2: party can take it for granted, and that's in some

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Speaker 2: ways a good thing. But it could remove some of

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Speaker 2: the guarantees of stability and you could get you knowarticularly

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Speaker 2: if you get the far left party coming into some

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Speaker 2: sort of power sharing arrangement, it could exacerbate some of

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Speaker 2: South Africa's problems.

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Speaker 5: Yeah, and the interesting thing is you don't see a

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Speaker 5: lot with respect to election interferre to at least you're

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Speaker 5: not reading about that.

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Speaker 2: That was one of the things she said.

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Speaker 5: So this idea of a democratic process that still is

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Speaker 5: an undercurrent of that structure, I think that's quite important.

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Speaker 5: It's quite powerful.

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Speaker 2: I mean, I thought it was an incredibly optimistic thing

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Speaker 2: that she said that she said that basically this massive

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Speaker 2: democratic process in the country that's got a lot of

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Speaker 2: unhappiness huge amount of inequality is going very well. It's

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Speaker 2: well monitored, it's it's well administered, and everybody agrees that

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Speaker 2: we have to have a democratic transition. That's incredibly important.

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Speaker 2: I wish it was. It's true of the United States,

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Speaker 2: is of South Africa. Thanks for listening to this week's

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Speaker 2: voter Nomics from Bloomberg. This episode was hosted by me

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Speaker 2: Adrian Woodridge, with lots of help from Jackie Simmons. It

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Speaker 2: was produced by Samasadi, editorial direction from Victoria Wakely. Sound

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Speaker 2: designed by Mosses and am Brendan Francis Newman is our

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Speaker 2: executive producer. Sage Borman is Head of Podcasts. Special Thanks

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Speaker 2: to Yvonne Mahango and please subscribe, rate, and review wherever

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Speaker 2: you listen to podcasts.