If the markets and the rand are anything to go by, South Africa's new government of national unity has started off as a success.

The rand has continued to trade strongly and the JSE's largest stocks have all surged in the past week since the African National Congress (ANC) announced its plans to form a government of national unity (GNU) with the Democratic Alliance (DA) and the Inkatha Freedom Party (IFP), and which have been later joined by Goof and the Patriotic Alliance parties.

This initial enthusiasm should be seen as a positive sign for South Africa's economy, which has remained stagnant with roughly 1% growth per year over the past decade amid growing corruption and failing service delivery in many of South Africa's largest metros.

Of course, this optimism is based solely on perceptions, as investors see the IFP and, in particular, the DA as much more business friendly. The DA, for example, has called for replacing Broadbased Black Economic Employment (BBBEE) policies with UN Sustainable Development Goals and improving the governance of state-owned entities, in particular Eskom and Transnet, which are vital for a growing economy. While the DA's policies would be likely to further improve investor confidence in South Africa, the ticker tape of Ramaphosa's inauguration has yet to be cleaned up and there is still no guarantee the DA,...