PODCAST: Standard Bank warns of populist shift if GNU collapses

SA could veer towards more populist policies if the government of national unity (GNU) collapses, a scenario that would sour the business climate and unsettle financial markets, says Standard Bank chief economist and head of research Goolam Ballim.

Speaking on the first episode of The B20 Legacy in Motion, a podcast collaboration between Business Day and Sunday Times, Ballim said both the ANC and DA have much to lose if the GNU fails but their divergent approaches to the budget exposed deep fissures.

“Ideally, we would like to see the GNU continue. We would like to see it preserved,” said Ballim.

“The alternative in terms of policy uncertainty and perhaps worse, is a lurch to populist polices where the ANC relies on the MK party and/or the EFF. If that were the case, the business climate will sour because many, justifiably or otherwise, have the view that both the MK and EFF are more populist in orientation, more compromising of the guardrails of society, more assailing of property rights.” 

The fate of the DA as a member of GNU is in doubt after it dissented against the budget framework on Wednesday, prompting finance minister Enoch Godongwana to question its commitment to jointly running the country and putting pressure on President Cyril Ramaphosa to kick DA officials out of his cabinet. 

For more, listen to the podcast below, which is brought to you with the support of Standard Bank: