(Bloomberg) -- South Africa’s political leaders agreed to a broad alliance to form the next government and back the Cyril Ramaphosa’s reappointment as president after a shock election result left the nation without a majority party.

The Democratic Alliance and some smaller rivals agreed to join a so-called government of national unity, party leader John Steenhuisen said in a speech in Cape Town on Friday. The groups agreed to cooperate on electing the president and officials in the national and provincial legislatures, Fikile Mbalula, the secretary-general of the African National Congress, said in an interview.

Investors — keen to see an acceleration in Africa’s slowest-growing economy after Sudan and Equatorial Guinea — took heart from the signal of pro-growth policy continuity implied by the accord. The benchmark stock index rose 0.9% while the rand advanced as much as 0.7% to 18.305 per dollar. 

“The allure of power is likely to keep all members on board,” Simon Harvey, the London-based head of forex analysis at Monex Europe Ltd., said before the announcement. Still, for the rand to advance toward 18 to the dollar, “investors will want to see the coalition legislate decisively and in a manner that continues the positive structural reforms that were under way pre-election.”

The parties signed an accord prioritizing the economy among its 11 focus areas for the incoming administration. It touts fixed capital investment, structural reforms and fiscal sustainability as key objectives to accelerating economic growth. South Africa’s economy has expanded by less than 1% a year on average over the past decade — well below what’s needed to maintain living standards for the growing population.

Apart from the DA, other members of the alliance include the smaller Inkatha Freedom Party and the Patriotic Alliance, according to Mbalula.

“Support for this government of national unity is conditional on the continuation of those very same structural reforms we had gotten under way,” Finance Minister Enoch Godongwana said in an interview.

Parliament held its first sitting on Friday since elections last month failed to produce an outright winner and forced the ANC into partnering with one or more rivals if it wants to retain power.

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The alliance members agreed to back ANC’s Thoko Didiza as the speaker of the National Assembly. Lawmakers voted for the position after the Economic Freedom Fighters nominated their own candidate and Didiza won. The group have nominated the DA’s Annelie Lotriet as the deputy speaker, with a vote still under way.

The ANC, which has held power since apartheid ended in 1994, invited all the country’s main parties to join the next administration in a so-called government of national unity. 

Former President Jacob Zuma’s uMkhonto weSizwe Party, or MKP, and the EFF — both of which favor land expropriation and the nationalization of mines and banks — declined to participate. There are 400 seats in the National Assembly. 

 

The MKP alleged that the election was rigged, but the nation’s top court on Wednesday dismissed its application to stop parliament from convening. The party’s lawmakers boycotted Friday’s sitting. 

Zuma, who led the country for almost nine scandal-marred years before the ANC forced him from office, was ruled ineligible to stand for a seat because he was convicted of contempt for refusing to testify before a judicial inquiry into state corruption.  

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--With assistance from Robert Brand, John Viljoen, Ana Monteiro, Ntando Thukwana, Monique Vanek, Khuleko Siwele and Mpho Hlakudi.

(Updates with speaker’s election in ninth paragraph.)

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