South Africa’s national budget presentation has been postponed for the first time in the post-apartheid era due to a dispute within the coalition government. National Assembly Speaker Thoko Didiza announced the delay on Wednesday, describing it as unprecedented in the past 30 years. Initially scheduled for February 19, the budget will now be presented on March 12.
The postponement follows the African National Congress (ANC) losing its parliamentary majority in last year’s elections, forcing it to rely on coalition partners to pass critical legislation.
The delay stems from a disagreement over the ANC’s proposal to raise value-added tax (VAT) by two percentage points, a move strongly opposed by its main coalition partner, the Democratic Alliance (DA).
The proposed VAT hike was reportedly intended to address funding gaps in education and social programs but faced backlash from opposition parties and labor unions, who argued it would worsen financial pressures on struggling households. The deadlock has raised concerns about the coalition’s ability to govern effectively.
The uncertainty rattled financial markets, with the South African rand weakening by as much as 1% against the US dollar following news of the postponement.
Finance Minister Enoch Godongwana, who had been expected to deliver the budget, acknowledged the fiscal challenges facing the government and stressed the need for further deliberations to resolve the impasse.
The last VAT increase occurred in 2018, and another hike is seen as politically sensitive amid rising unemployment and slow economic growth.
The delay has also exposed deeper divisions within South Africa’s coalition government, which is made up of ten parties. Analysts warn that these fractures could complicate governance and policymaking in the months ahead.
The DA welcomed the postponement as a victory for taxpayers, arguing that alternative solutions must be found to stimulate economic growth without placing additional burdens on citizens. Meanwhile, concerns are mounting over how prolonged political wrangling could impact investor confidence and South Africa’s fragile economy.
