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# South Africa votes on Wednesday, and investors are watching the coalition, not the councils
- URL: https://www.businessbagel.com/south-africa-votes-investors-watch-coalition-not-councils/
- Published: 2026-11-02T01:00:00.000Z
- Updated: 2026-11-02T01:00:00.000Z
- Description: This week’s local elections will test the ANC-DA partnership that holds the national government together, and foreign bond investors have already shown how fast they can leave.
- Author: Christian Maidman
- Tags: Markets, Business Bagel News, #big

On paper, Wednesday’s vote is about who fixes the potholes. More than 29 million South Africans are registered to choose who runs their municipalities, and a record 136,790 candidates want the job. But investors are watching what the results could mean for the Government of National Unity, or GNU, particularly the relationship between the ANC and DA. The two parties govern together nationally but could soon find themselves negotiating against each other in some of the country’s biggest cities.

And those negotiations could get complicated. An eNCA/MarkData survey found that 68.7% of Johannesburg respondents believe their city has been badly run, while several polls suggest Johannesburg and Tshwane are heading for hung councils, where nobody wins outright and deals decide who governs. Elections analyst Wayne Sussman believes a smaller ANC-DA coalition is the most likely outcome, although agreements would probably have to wait until the results are known. The mood between the two is not warm: in October the ANC’s secretary-general, Fikile Mbalula, said “We must review the DA in the GNU.”

## The R41.3 billion week

Nick van Rensburg from [All Weather Capital](https://allweather.co.za/?ref=businessbagel.com) points out that an ANC-DA agreement could benefit South African shares. But he’s more concerned about what could happen if tensions between the parties cause the national GNU to collapse. He believes markets haven’t fully priced in that risk, warning that it could trigger a significant sell-off.

There is a recent example of how fast that money moves. Foreign investors held 32% of South Africa’s fixed-rate government bonds at the end of February. When the war sent markets into turmoil in March, they sold a record R41.3 billion in a single week, and the 10-year yield, roughly what the state pays to borrow for a decade, climbed by more than 90 basis points. Capital Economics, however, believes concerns about the GNU’s stability are exaggerated, and expects the vote to do little to the wider economy.

## An economy that grew on paper

Meanwhile, Stats SA announced last Thursday that South Africa’s economy is actually about 5% bigger than previously thought. It is now counting more of what was already happening: electricity people generate at home, illegal mining and manufacturing, and e-hailing. The economy was worth R8.04 trillion last year, not R7.64 trillion.

That technically makes government debt look smaller next to the economy. PSG’s Johann Els estimates the debt ratio falls from 78.2% to about 74.5%, but as he put it, “These are improvements in the ratios, not in the actual rand amounts of government borrowing or spending.” Nobody got wealthier, and last year’s growth was revised down from 1.1% to 0.9%.

But while the economy looks bigger on paper, businesses are still dealing with higher fuel costs. All Weather Capital estimates the war has added roughly R132 billion to South Africa’s fuel bill since February, with businesses carrying much of the diesel burden. Some relief lands on Wednesday too, when the fuel levy drops by R3 a litre for diesel and R1.50 for petrol until 1 December, at a cost to Treasury of R10 billion.

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*Views quoted from All Weather Capital are their own and not financial advice. All Weather Capital is an Authorised Financial Services Provider (FSP 36722). Full disclosures are available at allweathercapital.co.za.*