South Africa’s governing African National Congress (ANC) has suffered its worst electoral setback since apartheid ended in 1994.

BBC reports that “With 98% of the votes counted after Wednesday’s municipal elections, the party has lost the key battleground of Nelson Mandela Bay to the opposition Democratic Alliance (DA).

“The two parties are in a close fight for Johannesburg and Pretoria. But the ANC is still in the lead nationally, with 54% of the vote.”

The ANC is said to have won more than 60% of the vote at every national election since the end of apartheid more than two decades ago.

Unemployment and corruption scandals surrounding President Jacob Zuma have tarnished the ANC’s image.

Named after ANC liberation hero and South Africa’s first democratically elected president, the loss of Nelson Mandela Bay is a big blow to the party.

Many of the leaders of the struggle against apartheid come from the area.

The DA, which took 46.5% compared to the ANC’s 41% in Nelson Mandela Bay, says it is in talks with other parties to form a coalition in the municipality on South Africa’s southern coast.

Its leader Mmusi Maimane said Nelson Mandela Bay had voted for change.

“I think that to me says that our message got through – it says our people heard us and South Africans still believe in a dream of a non-racial South Africa, South Africans still want our country to prosper,” he said.

The ANC has conceded defeat in Nelson Mandela Bay after initially saying it was going to challenge the result.

Deputy President Cyril Ramaphosa promised the party would learn from the experience: “They think that we are arrogant, they think that we are self-centered, they think that we are self-serving, and I’d like to dispute all of that and say we are a listening organisation.”

It looks like no party will win an outright majority in the economic hubs of Johannesburg or Tshwane, which includes the capital, Pretoria, and coalition negotiations are already underway.

BBC South Africa analyst Farouk Chothia says the ANC’s urban vote has collapsed with both black middle and working classes switching to DA.

It is a historic moment showing the extent to which people are fed up with corruption and the ANC’s failure to deliver on its promises, he said.