The successful conclusion of South Africa’s 2026 municipal elections has so far already sent a positive message that holding free and fair elections can be good for the economy. 

In commenting on the outcome of the local election thus far, Prof. Raymond Parsons, economist from the North-West University (NWU) Business School, says for local and international investors, a predictable political process at various levels of government is a major pillar of business confidence. 

“Municipalities have become engine rooms of the economy that drive outcomes at the local coalface. The latest election results also strongly affirm a definitive further shift and realignment towards multiparty coalitions at municipal level.”

He says the horse trading that now takes place over the next 14 days must nonetheless ensure political stability, if local economic development is to be maximised. 

“Less partisanship and more progress will be needed. If South Africa is to break out of its current narrow 1% to 2% gross domestic product (GDP) growth corridor, it is also very dependent on functional local governments and their ability to maintain a positive environment for business activity.”

Prof. Parsons explains that business cannot operate without dependable water, electricity, roads and logistics. 

“All parties have previously committed to urgently fixing municipal governance and service delivery as their overriding priority, and must now be held accountable. As the incoming political leadership now seeks to form new administrations, effective and stable governance at local level is tangibly needed to help improve the investment climate for job-rich growth.”

He says it is also clear that the sheer scale of service delivery and infrastructural challenges now facing villages, towns and cities in South Africa requires a collective effort. Collaboration in local government is vital to ensure positive and sustainable outcomes. 

“In the evolving political landscape business must therefore remain willing to act as a constructive partner, such as through effective public-private sector partnerships, to expedite delivery and job creation at local level.”

Prof. Parsons says through strengthened engagements with the new political leadership, the new municipal governments and business must mimic the advantages that have already become apparent from the existing cooperation between the Government of National Unity (GNU) and the private sector.
 

Prof. Raymond Parsons