JOHANNESBURG –  Nearly a month since landmark national elections saw the African National Congress (ANC) lose its majority for the first time, forcing it to form a coalition to govern South Africa, a deadlock stemming from the allocation of cabinet positions threatened to topple the whole house of cards.

Tense negotiations, mainly between the ANC and the Democratic Alliance (DA), the two biggest parties in the coalition, led to delays this week of President Cyril Ramaphosa announcing his cabinet in the Government of National Unity (GNU). Fears were heightened and markets reacted badly to news of DA leader John Steenhuisen threatening to withdraw from the coalition amid leaks of letters between the two parties’ leaders showing them at loggerheads.

But by Friday, as Ramaphosa was due to meet Steenhuisen, the political bartering that characterised the last two weeks of talks showed signs of an imminent agreement. The rand – which fell amid news of the discord – strengthened following indications that a cabinet announcement was pending and that the government would include the market-friendly, right-leaning DA.

Political analyst Khaya Sithole said markets were in favour of the DA being part of the GNU – a multiparty coalition – because the party is unlikely to demand radical shifts in economic policy. “A GNU with the DA gives the perception that there will be continuity in economic policy because the ANC will maintain the trajectory it was on,” Sithole told Al Jazeera.

He said the DA – which holds 87 parliamentary seats compared with the ANC’s 159 – would not demand new policies or have sufficient political muscle to push through radical changes. “Markets are buying into the continuation of government policies and programmes,” Sithole said, adding that, “an ANC partnership with the DA does not upend the script.” He said markets adversely reacted to fears that the DA may pull out of the GNU because the alternative – a possible allegiance between the ANC, the left-wing Economic Freedom Fighters (EFF) and other smaller parties – represented uncertainty. (Al Jazeera)…[+]