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Daily Maverick
11 hours ago
- Politics
- Daily Maverick
The GNU at one — serial crises and continual turmoil are the order of the day
The first year of the Government of National Unity saw crises of power-sharing, policy fallouts, court challenges, declarations of mutual contempt between the ANC and DA, and the construction of a substitute coalition — followed by truces and a seeming compulsion to stay the course. South Africa's one-year-old Government of National Unity (GNU), established on 14 June 2024, has tottered from one near-death experience to the next. Serial crises and continual turmoil are the rules of the country's new coalition politics, not a passing phase. Simultaneously, the GNU's endurance speaks its own truth: this unlikely, ideologically clashing, publicly inconvenient but largely policy-convergent coalition is predisposed to persist. This analysis records the formal and de facto rules of prevailing coalition life in South Africa. The focus is on the national. Conventional coalition theory and insights from comparative case studies have limitations in fathoming the rules of the South African coalition game circa 2024-2025. The analysis thus chronicles the rules as they have unfolded. Site of contest The GNU coalition is a site of contest, rather than an internally stable construct. Adversity and continual contestation rule; coalition practice is part of a protracted election campaign that stretches from poll to poll. The GNU's lifeblood is acrimony and the amorphous relationship between the main political parties. This discordant and 'inconvenient' relationship (as per Mistra's Marriages of Inconvenience) persists by mutual agreement between the anchor parties. The GNU is not about bonhomie and generous cooperation. Parties do not aspire to a new, shared coalition identity. The phrase 'governing in the interest of the people of South Africa' is mostly a subtext. These and other rules of engagement have become ingrained as the coalition has matured in the past year. It is a coalition that might continue ruling South Africa, probably beyond the local elections of late 2026, possibly for the parliamentary term and at least until the ANC presidential substitution of 2027-2029. The heart of the GNU, by numbers rather than affect, is the relationship between the African National Congress (ANC) and the Democratic Alliance (DA). The two parties have a convenient majority of 62%, or a grand 72% with the inclusion of the other eight GNU parties. The ANC gains power against the DA in also having at its disposal a spare coalition of 52%, as seen in the VAT crisis of 2025 (even if the ANC has realised the pitfalls of possibly governing with this collection of micro and small parties). The ANC could also gain conditional coalition cooperation from the Economic Freedom Fighters (EFF) for a third alternative, although it is neither the wish of the majority in the ANC's National Executive Committee (NEC), nor the party's financial backers. Despite these alternatives, the ANC chooses to walk the path with the DA. 'Sufficient consensus' GNU rule-making started with the negotiation of the Statement of Intent (SoI) — South Africa's weak substitute for a coalition agreement. The ANC-DA negotiations were insubstantial. The SoI was confirmed and signed at the eleventh hour, on 14 June 2024. The election of the President, scheduled for that day, was the DA's leverage. It won the battle for decision-making by 'sufficient consensus', but effectively ceded power because it had to recognise the President's prerogatives to exercise functions. All parties agreed to respect the Constitution. There was no time (nor were opportunities created subsequently) to deliberate the appropriateness of constitutional provisions that had clearly not envisaged a coalition government. The SoI, not a legally enforceable document, helped limit GNU power-sharing because 'sufficient consensus' for decision-making came to be at the discretion of the ANC. The weak SoI aided the ANC's desire not to let the coalition government cramp its exercise of power. Disproportionate GNU power flowing to the ANC was confirmed in the number and designations of Cabinet portfolios. Such deliberations invariably help establish coalition governments, and many embryonic coalitions implode at this point. The DA emerged bloody-nosed from the Cabinet composition contest but accepted the outcome — caught off-guard after committing strategic errors in the negotiations for Cabinet positions, also recorded in Tony Leon's book Being There. Legal combat The infant coalition limped from one defining power-sharing and policy crisis to the next. The series of policy conflicts almost unravelled the GNU. Key conflicts included: The Basic Education Laws Amendment (Bela) Act, signed into law by President Cyril Ramaphosa in September 2024 (the National Assembly adopted it shortly before the 2024 election); The National Health Insurance (NHI) Act, signed by the President hastily in May 2024, just before the election (multiple professional bodies and political parties challenged it, ongoing by mid-2025, but it served the ANC's 2024 election campaign); and The Expropriation Act, signed by Ramaphosa in early 2025, despite the DA warning that it regarded the Act as unconstitutional. The DA litigated these and several other cases. The ANC argued that the DA opposed transformation and practised racially reactionary politics. The courts became a GNU partner of a special legal type. They were called on to offer legal answers to politically insoluble conflicts. The DA had been identifying low-hanging, procedural-matter fruit where lawfare could obstruct policies that the ANC refused to negotiate or renegotiate, now that the coalition era had rooted itself. Such legal combat among GNU partners, along with insolent mutual reproaches, including references to GNU partners as 'the enemy', were confirmed as further de facto rules of South Africa's new coalition game. It was accepted, equally, that these acts were not (necessarily) intended to kill the coalition. In the coalition policy battles, the DA felt free to act in the perceived interest of its constituents, to help position itself for future elections. The ANC, in turn, felt free to cast the DA as the reactionary foe. Several public opinion polls indicated that both the DA and ANC were gaining in voter endorsements for their GNU participation, with the DA gaining slightly more than the ANC. 'There shall be consultation' As the GNU wars escalated at the time of South Africa's Budget 2025, GNU rules were clarified further. The DA at last had the power it craved. The Budget and its fiscal framework need a 50%-plus National Assembly majority to pass. The DA, which was, at the time, only minimally consulted despite being the main GNU partner, rejected two versions of the Budget, due primarily to its disagreement with the proposed hike in Value-Added Tax (VAT). The ANC's options were to cooperate with the DA, work with the EFF and/or Jacob Zuma's uMkhonto Wesizwe (MK) party, or find a new small-party front. The ANC went shopping for new coalition partners outside of the GNU, but not the MK and EFF. It built a parallel majority coalition, with the inclusion of the non-GNU ActionSA and Build One South Africa. The bulk of the GNU micros remained part of the ANC's parallel majority coalition. In the universe of coalition government globally, outside soliciting is regarded as notice of (antecedent) 'coalition disbanded' — but not in the case of South Africa. ANC insults of the DA rocketed, although it tried not to be seen as instigating a breakup. Rather, the ANC's apparent strategy was to antagonise and frustrate the DA out of the GNU: it was a case of the DA being 'kicked out' versus 'frustrated out'. ANC factions continued as a major influence on GNU survival — it is also common globally that internal factions affect governing coalitions. June 2024's approximate 60-40 ANC NEC division between favouring or disavowing a GNU with the DA persisted at the time of the VAT crisis. Business showed its hand as a powerful partner in the coalition room, and this worked against the ANC's factional GNU demolition thrust at the time. Business leaders called on the ANC and DA to safeguard the GNU: its collapse could endanger economic growth and cost jobs. The game changed, with pressure added through the DA and EFF's legal challenge to the VAT increase and the ANC's growing recognition of the problem of continually accommodating a multiplicity of micro parties. In late April, the Treasury scrapped the planned VAT hike and tabled its third revised fiscal framework. The ANC reached out for an out-of-court settlement with the DA (the courts were still required to issue an order to avert the 1 May VAT increase). In an ANC-DA meeting soon thereafter, the DA expressed its 'sincere commitment' to stay in the GNU. To help preserve the fragile GNU, the ANC postponed an NEC meeting, and continued to do this at the time of writing, waiting first to achieve the Top Seven's consensus on its ongoing GNU alignment with the DA (or to let the dealignment fire burn itself out). The substantive (although incredulous that it only came roughly a year into GNU) coalition rule learnt at the time was that 'there shall be consultation'. Ramaphosa, ANC Secretary-General Fikile Mbalula and Finance Minister Enoch Godongwana all pronounced that they had learnt the lesson that coalitions require consultation; globally, in coalition practice, this is an entry-level criterion. No effective conflict resolution A coalition rule awaiting ANC discovery is that functional coalitions require a meaningful, operational conflict resolution mechanism (effectively absent in the Statement of Intent). The 'clearing-house mechanism' is being refined, but, to date, remains poorly defined and vastly underutilised. The de facto guideline in the interim is for coalition party leaders to 'talk it over with the President' — while the President maintains scarce availability. Coalition governance is on low-key piloting — after the base rule of executive or Cabinet constitution was asserted early in the life of the GNU: the ANC would have disproportionately large numbers in the executive, both in Cabinet and deputy ministerial ranks. The ANC retained power and control over the bulk of the state and government. Coalition rules included that opposition party ministers had to get on with the job, be discreet in claiming success lest it upset ANC ministers, not outshine ANC Cabinet members or predecessors, and be guarded in criticisms of Cabinet colleagues who suffer corruption charges. Opposition Cabinet members were monitored by ANC deputy ministers, but not vice versa. In the legislature and its committees, nevertheless, green shoots of accountability and responsible decision-making started appearing, tentatively. The opposition parties and 'GNU opposition parties' often converge in inputs. Coalition government under the GNU also entailed that Cabinet meetings may be suspended or minimised when it becomes too ghastly a prospect for ANC ministers to face, for example, DA colleagues. Despite the raging VAT-Budget-GNU crisis, which needed urgent resolution, just a few Cabinet meetings took place from February to May 2025. It was in the wake of DA leader John Steenhuisen's inclusion in the South African delegation that met US President Donald in May that a sense of normality returned to Cabinet interactions. More benefits than drawbacks These were the core rules therefore that shaped the GNU: evolving from the initial denial that it was a coalition, to keeping doors open for the cooptation of parallel majorities, trying to do coalitions without consultation, litigating against partners, shutting avenues for partner impact and influence, acrimonious intra-coalition relations, and eventually an apparent and veiled resolve to keep the GNU going. Centripetal refuted centrifugal at the time of the GNU's first anniversary. There were more benefits than drawbacks for the two anchor parties, either to the left and infused with gripping liberation narratives, or to the right and drawn to liberal precepts mixed with race nostalgia. This interparty distance also means that the GNU partnership aids electoral positioning and poll progress, which nurtures GNU prolongation. But look out for the moment when opinion polls start reflecting citizen disillusionment with the GNU's ability to deliver tangible prospects for economic growth, jobs and wellbeing. That will be a cue for the GNU glue to disintegrate. DM Susan Booysen is a Wits University emeritus professor and research consultant. She is the editor of the forthcoming Mistra Coalitions Barometer II, 2023-2025.
Yahoo
03-05-2025
- Business
- Yahoo
Mistras Group, Inc.'s (NYSE:MG) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?
With its stock down 9.6% over the past month, it is easy to disregard Mistras Group (NYSE:MG). However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. Particularly, we will be paying attention to Mistras Group's ROE today. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Mistras Group is: 9.5% = US$19m ÷ US$199m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.10. Check out our latest analysis for Mistras Group So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. When you first look at it, Mistras Group's ROE doesn't look that attractive. Next, when compared to the average industry ROE of 21%, the company's ROE leaves us feeling even less enthusiastic. Despite this, surprisingly, Mistras Group saw an exceptional 61% net income growth over the past five years. Therefore, there could be other reasons behind this growth. Such as - high earnings retention or an efficient management in place. As a next step, we compared Mistras Group's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 11%. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Mistras Group is trading on a high P/E or a low P/E, relative to its industry. Given that Mistras Group doesn't pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business. Overall, we feel that Mistras Group certainly does have some positive factors to consider. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
