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For a number of years, roughly from 2016 and 2017 onwards, the firm’s core political and economic guidance to clients rested on a set of high confidence expectations about South Africa’s trajectory. First, that Cyril Ramaphosa would succeed Jacob Zuma as African National Congress (ANC) leader and become President of the country. Second, that his administration, at odds with the great bulk of analysis, would not deliver the kind of structural reform required to materially lift the national investment rate. Third, that the ANC would, as a consequence, lose its national electoral majority. Fourth, that this loss of dominance would force the ANC into some form of governing arrangement with the Democratic Alliance (DA) – and not with its radical splinters.

These calls proved correct and provided a stable analytical base to work from during a period of political transition from ANC majority to coalition government. The firm was throughout sufficiently confident in those calls that it saw little need to lean heavily on our scenario planning methodology – because it knew enough for the direction of travel to be relatively clear.

That clarity is now fading.

Ramaphosa is approaching the end of his political influence. The next ANC leadership contest is open and uncertain. At the same time, the DA has not demonstrated an ability to break through into national majority support or to convincingly project governing capacity at scale. The political centre of gravity in South Africa is therefore becoming less predictable, and as that has occurred the economic implications have become less predictable too.

In response, the firm has formalised a new scenario model to track and forecast South Africa’s evolution to 2034.

This model replaces implicit certainties with a structured framework built around three distinct pathways – each tied to a particular political uncertainty.

As a note to readers: forecasting is the practice of saying that a single point in future space and time will be reached, scenario planning, on the other hand, is the practice of saying that there are too many uncertainties for a single point forecast to succeed and that a series of futures must instead be sketched which can later be assigned probabilities and the like.

The first of these is the benchmark view, which represents the central expectation of what will happen. This is the scenario of greatest likelihood – but unlike the analyses of the past decade it is not a certainty and other scenarios could come to overtake it.

It is for this reason accompanied by another two other scenarios: an upside and downside deviation, each plausible but, at this stage, less likely than the benchmark.

There is no fourth possibility and events as they play out must therefore occur along the lines of one of the three scenarios – that is the assumption of the firm. By understanding markers or events that would be unique to each scenario it becomes possible to map your way into the future of the country with a very high degree of accuracy and thereby to anticipate events before they occur in order to take advantage of opportunities and navigate safely around risks.

Scenario 1: The benchmark pathway

The benchmark pathway is the central expectation and most likely scenario. It assumes that neither the ANC nor the DA achieves national electoral majorities in the 2029 or 2034 elections. Instead, South Africa continues to operate through coalition style arrangements, most likely some form of the current Government of National Unity (GNU) or its functional equivalent and this may include a minority ANC government in a confidence and support arrangement with the DA.

In this environment, neither the ANC nor the DA are able to generate sustained reform momentum. The ANC continues to struggle with internal fragmentation, leadership transition, and policy incoherence. The DA remains constrained by limited national reach and uneven governance credibility outside of select constituencies.

The consequence is a continuation of what can best be described as managed stagnation.

Policy drift persists. Reform remains incremental rather than structural. State capacity improves only at the margins in selected institutions while remaining weak in others.

As a consequence, what will turn out to be a very fortuitous trend deepens to become the most important trend shaping the future of the country. Frustration with the slow pace of change accelerates behavioural adaptation within society. As the central state disappoints, regional and private actors take upon themselves what were once the key functions of that central state.  The enclave dynamic, already visible in the economy and society beyond it, becomes so entrenched that it generates a permanent and sustainable option for the middle classes to remain in the country.

As a consequence, and unlike the pattern of destabilised post-colonial emerging markets before it, political failure of the central state in South Africa does not lead to macro-level collapse, instead much of the capital, skills, and employment base is retained within the country county subsiding poorer communities – and thereby securing a degree of order.

The enclaves themselves, essentially networked in practice, come to represent one of the world’s leading emerging markets. Critically the argument is that their strength rises relatively to the weakness of the state and does this to an infinite degree.  So, if the state is a little bit weak they are a little bit strong. If the state is very weak, they are very strong. If the state enters an era of chaos and collapse where it cannot execute any of its key functions they will be unassailable.

That means, that in addition to cross subsidising the broader society with jobs and incomes, that the middle classes have no more catastrophic downside risks in the event that the central government continues to disappoint. In fact, South Africa may become a drawcard for high-net worth immigration globally causing the enclaves to outperform many key global markets.

The macro economy therefore does not collapse just because the government remains weak and unbale to drive reform, but neither does it converge with emerging market peers. Growth, investment, and confidence remain broadly consistent with the patterns of the past decade. Living standards stagnate broadly but may lift for the middle classes. Political volatility persists but is contained.

In hard terms the rate of macro-economic growth will stutter at around 1% or maybe 2% whilst the national unemployment rate stays at near 30%. But the top-end enclaves may see growth rates of near 4% or 5% and unemployment rates of near 5%. Neither the ANC nor the DA nor any other party becomes politically dominant via a national majority.

We assign this pathway a probability of 65%.

Scenario 2: The upside pathway

The upside pathway represents a meaningful structural deviation from current trends. It is premised on a decisive shift in political leadership within the ANC ahead of the 2029 election (or if not then, then in the 2030s), producing a reform-oriented leader capable of rebuilding confidence and re anchoring policy credibility. Within the firm’s assessment, the only plausible figure with the required profile and political positioning is Patrice Motsepe.

In this scenario, the new ANC leadership stabilises internal party dynamics and reopens a reform agenda focused on infrastructure, investment conditions, and pragmatic economic restructuring. Crucially, this leadership is able to secure functional cooperation with the DA within a GNU framework, converting coalition politics into a mechanism for reform rather than gridlock.

The effect of this shift is a measurable improvement in business confidence. That confidence translates into higher fixed investment, particularly in infrastructure, logistics, energy, and export-oriented sectors. As investment rises, growth accelerates and fiscal pressure eases through stronger revenue performance.

Politically, this environment produces a rebound in ANC electoral support in 2029, with the party recovering a national majority by 2034. The DA returns to opposition where it remains an important institutional anchor within South Africa’s democracy and economy.

The cumulative effect is a transition towards a more conventional emerging market growth path. Investment ratios rise, productivity improves, and South Africa begins to converge with peer economies in terms of growth performance through the 2030s.

In hard terms the rate of economic will rise to between 4% and 5% whilst the unemployment rate fights its way to under 20% and then, on that track, to nearer 10% by 2049. The ANC restores its political majority (or the current ANC-DA GNU remains).

We assign this pathway a probability of 20%.

Scenario 3: The downside pathway

The downside pathway reflects a breakdown in both economic discipline and political moderation. In this scenario, the ANC leadership transition produces a more populist and ideologically rigid outcome, shifting the party further leftward in response to internal pressure and electoral competition.

The DA is removed from the governing arrangement. The ANC instead moves into alignment with more radical opposition forces, including the Economic Freedom Fighters and elements of uMkhonto weSizwe Party-aligned structures. Policy direction shifts decisively towards redistribution without growth enhancing reform.

This includes interventions such as aggressive expropriation policies, national health insurance, expanded state control over key sectors, and the implementation of a heavily constrained private sector operating environment. Confidence deteriorates rapidly. Fixed investment declines sharply. Capital outflows increase and currency weakness intensifies.

The macroeconomic consequence is a sustained period of negative growth. Fiscal stress increases as revenue weakens and expenditure pressures rise. Debt dynamics deteriorate. Over time, the state becomes more interventionist – producing a cycle of accelerating collapse.

Unlike scenario one – in this third scenario the state becomes quite strong and effective in what it does, although in an increasingly fascist or autocratic sense. It is able to crush dissent and undermine the enclavisation phenomenon. Remember that in scenario one it is the weakness of the state that allows the enclaves to thrive – alter that assumption to a strong autocratic state, and the enclave prognosis falters.

Socially and politically, rising unemployment and falling real incomes fuel populism. Institutions come under pressure. Political competition becomes more polarised and less predictable. Despite this deterioration, the ANC restores electoral dominance through relying on state security structures to crush dissent and undermine opposition whilst eroding the courts, the free media, and sabotaging the electoral system.

The result is a recessionary environment with a collapsing currency and degraded civil rights at the hands of an effective, if autocratic, central administration.

In hard terms the economy will be in recession, the unemployment rate will be above 30%, and the ANC or its successor will have a political majority.

We assign this pathway a probability of 15%.

How the model works

The central purpose of this framework is not to produce a single forecast by overcoming uncertainty but rather to employ the greatest uncertainties facing South Africa’s politics as units of analysis in order to map a set of plausible political and economic futures.

Each future is designed to be deliberately distinct to a degree that whatever future it is makes a material difference to investors and to be people living in the country.

At the heart of the analysis lies the long tested thesis of cause and effect in South African politics and economics that confidence determines fixed investment rates, fixed investment determines the growth rate, the growth rate determines employment and living standards levels, and employment is the most important driver of political behaviour.

This feedback loop is the central organising principle of the model.

Charting the future

The nine charts below show how this thesis applies to the scenarios.

The chart below shows investor confidence as an index to date and then projected under each scenario into 2034.

The chart below shows the same thing for consumer confidence.

The third chart, below, shows the likely effects on fixed investment as a share of GDP.

From fixed investment flows the economic growth rate projected on the chart below to 2034.

From that flows GDP per capita on the chart below.

The growth rate will also in turn inform the unemployment rate for each scenario shown on the chart below.

The chart below shows support for the ANC in each scenario (note that in scenario 3 the ANC has merged back with the EFF and MK).

The rand trajectory is shown on the chart below.

And finally the inflation outlook to 2034.

Over time the firm and The Common Sense will be watching South Africa’s real time political and economic data and talking to investors, diplomats, and politicians. By factoring what is being said through the data it will become possible to track very closely whether the central thesis of this analysis, that Scenario 1 will hold up is correct. For now that is the assumption as this is where the data and the information points. But should that begin to change, either to the upside or the downside, the probability estimates may need to be adjusted. That process will give a very useful direction of travel indicator that investors and ordinary households alike can use to gauge strategies on life or investment in a future South Africa.