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South Africa and its bourse receive ANC victory with optimism

By GAR staff on 21.05.2014.

Both economic pundits and the Johannesburg stock exchange have reacted positively to ANC’s confident victory with 62% of the vote at 73% turnout, granting President Jacob Zuma a second five-year term and the ANC the go ahead to pursue its National Development Plan.

In his acceptance speech, Zuma dedicated his re-election to the late Nelson Mandela, saying: “We dedicate our victory to Madiba's memory,” while re-affirming his electoral platform’s promises to push through business-friendly reforms and pursue economic growth.

“This mandate gives us the green light to implement the National Development Plan and to promote inclusive economic growth and job creation.”

Referring to a pro-business platform adopted and now pursued by the ANC since 2012, he affirmed: “This mandate gives us the green light to implement the National Development Plan and to promote inclusive economic growth and job creation.”

The ANC can now use its renewed mandate to drive through this plan, which rejects nationalisation and moves away from South Africa's labour unions to instead emphasise investment and infrastructure.

South Africa’s bourse similarly responded positively to the result, with the JSE FTSE All Share Index rising swiftly following confirmation of the result by South Africa’s electoral commission.

Two weeks in, that upward trend has continued unabated to the tune of 1.6% growth.

While the JSE’s volatile Gold Index has slumped by around 4.8% since the election, the JSE Industrial Index rose by 2.9%, in a more telling indicator of the country's buoyant economic confidence.

Workers are also returning to the country's platinum mines after Lonmin, Anglo American Platinum and Impala Platinum bypassed the unions and took their wage offers directly to employees in a bid to end a 15-week strike costing $17bn – the priciest job action in the history of South African mining.

Zuma’s latest controversy over the “inappropriate spending” of state funds on his Nkandla residence seems to be have been largely ignored by ANC’s loyal electorate, and the party is now challenging the state watchdog agency over the proposed reparation of $23m in costs.

The party’s campaigning instead focused on touting the ANC’s record of promoting democratic freedoms and providing housing, water and electricity to millions of people, even as the country struggles with high unemployment and a widening inequality gap.

In the wake of the electoral debut of Julius Malema’s Economic Freedom Fighters (EFF) at 6% of the vote, the ANC is especially keen to promote its own brand of business credentials over EFF’s popularist promise to employ Zimbabwe-style land grabs, wage hikes and mine nationalisation.

“They feel that the electorate expects them to do more about poverty and inequality,” said Professor Steven Friedman, director of the University of Johannesburg’s Centre for the Study of Democracy, told the UK Telegraph. “It could be the start of a new process in this country.”

Democratic Alliance leader Helen Zille also hailed her party’s receipt of 22% of the vote – in elections that mark 20 years since the end of white-minority rule, commenting: “Perhaps this vote will be seen, in retrospect, to mark real multi-party politics starting to become well-embedded.”

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