One year in and the government of national unity has yet to usher in a tangible economic boost. Yet, despite its ructions, one positive is slowly emerging: when push comes to shove, South African politicians can actually work together.

With a fractious year under its belt, the long-term prospects for South Africa’s government of national unity (GNU) are as changeable as the weather. Yet, despite the simmering tensions, it’s becoming increasingly apparent that there is also a pragmatic realisation among those at the coalface of governing that these are early days and all parties are still getting to grips with the dynamics of coalition politics.

Ruling by coalition is notoriously challenging, even more so when the two biggest partners are primed to be at each other’s throats. Even well-established democracies like Finland, Italy and Germany – all of whom have greater coalition experience – stumble at times.

The reason so many coalitions fail has everything to do with putting political parties with widely divergent ideologies into a room and effectively saying ‘get on with it’. It is hard to build consensus and a shared vision for the future when the fundamentals are not aligned. Yet, the discomfort that comes from being forced to listen and hear one another can be powerful.

As American civil rights activist Bernice Johnson Reagon once put it: “If you’re in a coalition and you’re comfortable, you know it’s not a broad enough coalition.”

Take comfort in the discomfort

Fortunately, few are really comfortable with South Africa’s GNU; so that must spell some good news.

With only a handful of multi-party coalitions under our belt – including the 1994-1997 GNU and the City of Cape Town coalition between 2000-2006 – much was being asked of the widely divergent partners in this GNU. As if the differences in opinion and style among the main players – the African National Congress (ANC), Democratic Alliance (DA) and Inkatha Freedom Party – were not enough, South Africa’s GNU also features: the Patriotic Alliance, Freedom Front Plus, United Democratic Movement, Rise Mzansi, Al Jama-ah, the Pan Africanist Congress of Azania, and GOOD.

Given the line-up, perhaps our expectations were too high in June 2024 when the coalition was formed. Certainly, many overseas commentators regarded this as a coalition destined to collapse. What was simmering under the surface, however, was a fervent hope that the GNU partners would find a way to support business and create a more investor-friendly economy. Indeed, the initial response by markets to the GNU’s formation was encouraging: the JSE Capped SWIX ticked up, South African nominal bonds surged, the rand strengthened, and foreign investment flows improved.

Regrettably this sentiment has not been sustained. Investment inflows and GDP continue to disappoint with growth of 1% expected for 2025, as per the South African Reserve Bank’s latest forecast.

However, there have been some wins. All 10 parties have rallied behind Operation Vulindlela’s rail, electricity, water and digital communication reforms. Some milestones have been reached, including a reduction in loadshedding and the completion of the spectrum auction that opens the door to improved digital connectivity and lower broadband costs. Important reforms are underway with respect to South Africa’s e-visa system.

Unfortunately, there have also been some significant stumbling blocks, with this year’s National Budget proving a pivotal moment as cross-party support derailed the ANC’s proposed VAT hike. The tensions played out publicly between February and May, with April representing the peak of the country’s anxiety as the market priced in a coalition break up.

In addition, many still find the somewhat harsh and condescending tone of the second-largest party in the GNU, the DA, hard to stomach. This approach may work well on the election campaign trail, but it doesn’t sit well in a partnership where all parties need to soften their approach, adapt and work out issues behind closed doors if the coalition is to remain sustainable.

Despite all the Budget upheaval, what is interesting to note is that investors were less worried, with many regarding the Budget’s three iterations as a signal that the GNU was, actually, quite robust. The recent announcement of Budget process reforms by National Treasury, and a call for better coordination, wider consultation and increased focus on fiscal efficiencies, should be welcomed.

Developments like this – alongside the united front shown by South Africa’s delegation to the White House in May 2025 – indicate that maybe, just maybe, our political approach is maturing. What is looming though, and could dash progress, are the 2026 municipal elections.

Looking to 2026, and beyond

The longer the GNU lasts, and compromise on both sides eclipses ugly public standoffs, the harder it will be for individual parties to differentiate themselves, their achievements and failures in the eyes of the public. This begs the question: How will the ‘GNU 10’ handle the upcoming elections and how much firepower do these blurred lines give parties outside the coalition?

The reality is that the outcome of the 2029 general election may well deliver another coalition. What the past year confirms is the critical importance of formal and structured coalition agreements, with clear guidelines and formal dispute mechanisms. Such transparency would go a long way to regaining some of the trust these internal tensions have eroded among the general public.

Only steady, positive progress that yields tangible results will help to restore confidence, encourage local investment, and coalesce society around a common goal of driving jobs and increasing GDP growth. As a small open economy, South Africa will always remain vulnerable to external developments like the United States’ current tariff flip-flopping. However, GDP growth should ultimately be more firmly in our control. On this score, Operation Vulindlela’s efforts are a step in the right direction.

While these changes will take time, they are the right actions to dislodge us from the current rut of less than 1% growth. These reforms should unlock better investment opportunities and private sector participation in the economy, which would represent a big GNU win and a demonstration of success.