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2024: The year of elections
2024 will see an unusually high number of large and geopolitically significant economies hold elections. According to Bloomberg, voters in countries representing 41% of the world’s population and 42% of its gross domestic product will have a chance to elect new leaders during the year. What makes the various elections particularly noteworthy is the fact that they are set to take place against a backdrop of heightened international tension and fragility and will shape global affairs during the second half of the decade.
Countries heading to the polls in 2024 span a spectrum in terms of size and influence, ranging from resource-rich nations such as Indonesia and Venezuela, politically unstable South Sudan, geopolitical hotspots Taiwan and Pakistan, and several western territories such as the US and the UK. While each election will grapple with its distinct issues, overarching global themes are likely to emerge, influencing not only the respective nations but also casting an impact on Namibia and South Africa, both of which are also slated for elections in 2024.
Of all the elections in 2024, the one that will probably dominate the concerns of investors and foreign governments is that of the United States. Both the leading candidates for their respective parties (Donald Trump for the Republicans and Joe Biden for the Democrats) have significant vulnerabilities. A Biden victory would provide continuity of current policies, but he is regarded by many as too old to serve as president. A formidable running partner as vice president would help his campaign, but Kamala Harris has been a disappointment to blue supporters thus far. Meanwhile, a victory for Trump would probably see a reverse of Biden’s policies and could weaken Western unity. In addition, US foreign policy would be less predictable, especially regarding the Middle East and Russia.
Even if Trump does not secure the presidency, his expected role as the Republican candidate means that his campaign rhetoric and influence could create significant global uncertainty. These uncertainties typically influence investor sentiment and could lead to a weaker rand and higher interest rates on South African (and by extension Namibian) government debt, as investors withdraw funds from emerging markets which they see as relatively riskier and instead opt for “safe havens” in the form of developed countries.
The presidential election in Taiwan in January will be another geopolitically sensitive one. The island’s posture towards mainland China will dominate the election. The governing Democratic Progressive Party (DPP) will be seeking to secure a third consecutive term in office. Considering the DPP’s preference for Taiwan’s de facto independence, a potential third term for the party could signify heightened crossstrait tensions over the next four years. This, in turn, would contribute to increased tensions between China and the United States.
Confronted with escalating Chinese aggression, the opposition parties (the Nationalist Party and the Taiwan People’s Party) would meanwhile adopt a more compromising stance towards China. Should the DPP retain the presidency, the likelihood of losing its majority in Taiwan’s legislature during concurrent assembly elections poses a challenge, potentially hindering the passage of laws targeting Chinese influence or budgets aimed at increased defence spending.
Elections which should have less of an impact on Namibia include the United Kingdom’s, which is the country most likely to see a change of ruling party, although the margin of victory for the Labour Party may be narrower than opinion polls currently suggest. India’s general election is due to start in April, and it is widely expected that prime minister Narendra Modi’s conservative Hindu nationalist Bharatiya Janata Party will secure a third consecutive victory, which would continue to prioritise business-friendly reforms.
Closer to home, South Africans are likely to head to the polls in May. Support for the ANC, which won 57% of the vote in the last election, has fallen below 50% according to certain recent polls, raising the likelihood that the party will need to negotiate with a group of smaller parties to form a coalition. An ANCEFF alliance seems unlikely at this stage but cannot be entirely ruled out, especially if the ANC needs to make up more than 10 percentage points. Such a coalition will rapidly deteriorate investor confidence as it increases the likelihood that radical populist policies may be introduced. If the ANC wins by a slim majority, the policy-making process and policy content should remain largely unchanged. The South African election will undoubtedly be closely watched by investors around the world and could bring with it exchange rate volatility.
Locally, the next presidential and National Assembly elections will be held in the latter part of 2024. The ruling SWAPO party elected Netumbo Nandi-Ndaitwah as the party’s vice president at its 6th Congress in 2023, paving the way for her to become the country’s first female president as president Hage Geingob has reached his limit of two terms in office. She is generally seen as a relatively steady hand, although the possible implementation of certain controversial policies such as the Namibia Investment Promotion and Facilitation Bill and National Equitable Economic Empowerment Framework could derail investor sentiment that has been building up following the oil discoveries in 2022.
2024 will undoubtedly be a pivotal year for global politics. While the outcomes of many of the elections are unlikely to surprise, the results of some large economies still hang in the balance. The outcomes of several of these elections should not have a direct impact on Namibia, but as explained above, the uncertainty surrounding them may have an effect on the exchange rate and borrowing costs.
