Johannesburg, South Africa – 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.

Leaked letters

The negotiations between parties in the GNU over cabinet positions were marked by a flurry of meetings and correspondence between Ramaphosa and party leaders.

During talks, the DA’s demands for specific powerful ministerial positions prompted a stern warning by Ramaphosa in a letter, leaked to the media, that the “DA has jeopardised the foundation of setting up a Government of National Unity by moving the goalposts”.

The DA began negotiations with a long list of demands which included 11 cabinet minister posts, a dozen deputy minister positions – including the deputy finance post – and other changes in governance legislation.

The party first demanded the deputy president position but conceded when ANC negotiators pushed back.

The ANC labelled the initial demands from the DA as “outrageous” and sought to negotiate with other parties as a backup.

A subsequent meeting between Ramaphosa and Steenhuisen appeared to have settled differences and calmed tensions.

However, after agreeing to six positions in the cabinet, the DA dug in.

Steenhuisen – in a letter to Ramaphosa – threatened to withdraw from their coalition agreement if Ramaphosa did not award the party eight ministerial positions.

“On a pure proportional basis, out of a Cabinet of 30, the DA’s share of support within the GNU translates to nine positions rather than the six that are currently on the table. Similarly, we cannot see the rationale for reducing the number of DA Deputy Ministries to only four,” Steenhuisen said in a letter to Ramaphosa dated June 24.

Ramaphosa took a hardline response, giving the DA a take-it or leave-it offer, after refusing to increase the number of positions offered to the DA.

“I must advise that we are continuing to hold discussions with other parties over the portfolios they could occupy as we seek to finalise the agreement on the GNU. I need to advise that the task of setting up government is quite urgent as we cannot continue with this paralysis,” Ramaphosa wrote in a letter dated June 25 that was leaked to the media.

The DA has 21 percent of electoral support compared with the ANC’s 40 percent. The other parties who have signed a declaration of intent make up 8.5 percent of combined electoral support.

‘Almost done’

On Friday, media reports quoting DA officials said the party is still committed to working out a deal with Ramaphosa.

Meanwhile, Fikile Mbalula, the ANC secretary-general, posted on X that parties were “almost done with GNU discussions … It will be done as promised.”

Good morning South Africa almost done with GNU discussions,In the best interest of all south africans . It will be done as promised.

— ANC SECRETARY GENERAL | Fikile Mbalula (@MbalulaFikile) June 28, 2024

Also on Friday, Ramaphosa announced that the opening of the new parliament would take place on July 18.

The 71-year-old leader was re-elected for a second full term after the ANC’s unprecedented loss of support in the May 29 election – the first time since the end of apartheid in 1994 that the party got less than a 50 percent majority.

In the aftermath, the ANC opted to form a coalition government. But they decided against a firm grand coalition with the DA, and opened up negotiations with the smaller parties represented in government to be part of the GNU.

The GNU now comprises 10 parties, including the nationalist Inkatha Freedom Party (IFP), right-wing populist Patriotic Alliance (PA), and the Pan Africanist Congress (PAC), among others.

Political analyst and commentator Lukhona Mnguni said the DA’s demands proved that their participation in government alongside the ANC remained “an absolute gamble for them”.

“They want enough insulation from the ANC and they want to prove that they have enough isolation from the ANC,” Mnguni told Al Jazeera.

He said the DA fears being swallowed by the ANC in the GNU and want to assert themselves despite the ANC having twice as much support as they have.

“The fight is about their political interest as political parties and how it affects their standing in the 2029 elections,” he said.

‘Anxieties’ and differing interests

Mnguni said the back and forth gave an indication of the “anxieties” the DA had about being part of government with the ANC and other smaller parties.

While the DA preferred a grand coalition with the ANC to co-govern the country, the ANC has insisted on bringing smaller parties into a unity government.

Following its list of demands, ANC leaders accused the DA of negotiating in bad faith and pushed back on all fronts.

“The ANC’s actions show vulnerability and assertiveness. The two could be a dangerous combination because it can create a deadlock,” Mnguni noted.

During a final series of talks between Ramaphosa and Steenhuisen, the latter insisted that the DA be awarded the Department of Trade, Industry and Competition.

That ministry is key in developing economic policy and oversees the government’s transformation efforts, as well as efforts to break monopolies.

The DA, a largely white-led party, is not in support of all the ANC’s Black empowerment programmes.

The party’s demand for the trade and industry position raised the ire of ANC leaders who insisted that the DA were overplaying their hand in negotiations.

Mnguni said the DA sought to ensure they had influence in the executive.

“Both parties could back out,” he said when asked about the possibility of the DA walking out of the GNU.