South Africa’s ruling party looks set to fall short of securing a parliamentary majority for the first time since surging to power at the end of apartheid three decades ago, ushering in a period of uncertainty with a coalition partner needed to retain control.

The African National Congress is on course to win 42% of the votes cast in Wednesday’s national election, according to projections based on early results. That would be a massive 15.5 percentage point drop from the last vote five years ago.

If the state-owned Council for Scientific and Industrial Research’s modeling proves accurate, the ANC will probably need to team up with one of its biggest rivals to cross the 50% threshold, with its market-friendly main opposition the Democratic Alliance one of the chief options. The ANC could also join forces with one of two populist parties, who back the nationalization of mines and banks, unnerving financial markets concerned about the likely hit to investment.

The rand plunged as much as 2% on Thursday before paring losses and trading at 18.65 per dollar by 1:07 p.m. in Johannesburg. Stocks also tumbled, with the FTSE/JSE Africa All Share Index falling as much as 2.3%. The yield on local-currency bonds maturing in 2035 rose 17 basis points to 12.2%, a five-week high.

“This is watershed moment for South Africa and has the potential to redraw the political map,” said Daniel Silke, the director of Cape Town-based Political Futures Consultancy. “It ushers in an era of substantial uncertainty for South Africa as the ANC will be forced to choose its political bedfellows and the economic orientation that it will present to the country over the next five years.”

The CSIR model, which has a 2% margin of error and proved broadly accurate in previous elections, was run using declared tallies from 8.24% of voting districts.

The model also shows that:

•The Democratic Alliance, currently the main opposition party, is likely to win 22.3% support nationally.

•The populist Economic Freedom Fighters is on track to garner 9%.

•The new uMkhonto weSizwe Party, which is led by former President Jacob Zuma, is expected to win 12.8%.

ANC Chairman Gwede Mantashe said he was surprised how well Zuma’s party appears to have performed. The so-called MK Party is expected to secure 43% of the vote in the KwaZulu-Natal province, a former ANC stronghold where the ex-leader ousted by President Cyril Ramaphosa has a strong support base.

Mantashe wouldn’t be drawn on plans for a coalition, and said the ANC’s final tally would likely improve on the latest projections.

‘Watching results’

“I am not thinking of a coalition, I am watching results,” he said in an interview at the national results center near Johannesburg. “The outcome will determine whether we discuss coalitions or not.”

The projections, which were aired by the public broadcaster and don’t constitute an exit poll, are broadly in line with most forecasts from opinion polls that were conducted before the vote. Final results are expected to be announced over the weekend.

“The ANC, if it continues in power, has to negotiate a coalition,” said Siphamandla Zondi, a politics professor at the University of Johannesburg. “It will test whether this country has mature political leaders.”

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Support for the ANC has dwindled amid widespread disgruntlement over a moribund economy, unemployment at 33%, one of the world’s highest crime rates and the collapse of government services in many areas.

Reforms instituted by Ramaphosa’s administration, including addressing energy shortages and tackling snarl-ups on railways and ports, have made some progress in tackling the malaise. Analysts see gross domestic product expanding 1.1% this year, up from 0.6% in 2023, and advancing further in 2025.

“It’s still early, but if these trends continue it will be a painful wake up call for the governing party that is now being punished for lack of service delivery,” said Melanie Verwoerd, an independent analyst and former ANC lawmaker.

The official results from almost 20% of the 23,293 voting districts show the ANC had 43.2% support, the DA 24.9%, the EFF 8.8% and the MKP 8.1%.

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(With assistance from Alister Bull, Paul Vecchiatto, Colleen Goko, Khuleko Siwele, Robert Brand and Rene Vollgraaff.)

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