The formation of a coalition government between the African National Congress and the Democratic Alliance in South Africa has the potential to raise the country's macroeconomic outlook, but the government's reform drive will likely face severe challenges linked to intra-coalition ideological and political disagreements and strong pushback from unions. On July 18, South African President Cyril Ramaphosa delivered his Opening of Parliament Address to lay out his new government's priorities. The address included pledges to reform local government, expand the use of public-private partnerships and continue reforming South Africa's state-owned enterprises. Ramaphosa's announcement came after the center-right Democratic Alliance party, or DA, agreed to join a Government of National Unity (GNU) with the ruling African National Congress party, or ANC, and eight other parties on June 14.