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INVESTEC CEO Fani Titi said that South Africa cannot afford the instability and uncertainty that comes with coalition governments that implode.
Titi used the coalition failures in the Johannesburg and Ekurhuleni metro’s over the last few years as evidence of what can happen when a unity government fails to adequately work together.
"If you look at coalitions in the metros, they are unstable, they don't engender any confidence," Titi told Talk Radio 702 on Monday.
"We cannot afford that type of instability and uncertainty at national level. We need policy certainty so that businesses can invest with confidence," he added.
The CEO said that in his view the government of national unity (GNU) should just be comprised of two or three mature parties.
This would foster social cohesion and better economic policies.
Titi also added that a centrist government would prioritise economic growth and would lead to better employment levels.
Furthermore, this government would boost business confidence, he added.
"If the economy grew at 1% more than the current trend, the fiscus would be able to collect approximately R100 billion more per annum," Titi explained.
"That will give you the ability to invest, but also give you the ability to look after the most vulnerable. To the contrary, if we have a government that chooses a policy framework that is anti-business, anti-investment, you could easily see the rand blow out," he said.
- Snapshot of SA economy this week -
All eyes will be on the South African markets and the rand's strength against global currencies in the coming days as the first sitting of the National Assembly will be held on Friday, June 14.
The rand was trading at around R18.73 against the US dollar on Tuesday at 8.30am. The rand was trading at around R20.16 to the euro and around R23.81 to the pound.
Chantal Marx, head of investment research at FNB Wealth and Investments, said a weaker dollar was pushing investors into what are seen as safe investments, such as gold and cash.
Gold prices rose 0.5% to above $2,300 (R43,239) per ounce on Monday. Gold was trading at R43,135 per ounce on Tuesday.
Stocks on the JSE began the week on the back foot, with the all-share index falling as much as 1% and nearly dipping below the 76,000-points mark, dragged lower by resources, tech, and real estate shares on the back of heightened political risks in the country.