South Africa’s 2025 Budget Deliberations Push Deadline

South Africa’s cabinet was still debating the 2025 budget shortly before its presentation, following a prior postponement due to disagreements over a proposed VAT increase. The Democratic Alliance’s opposition has created a deadlock, representing a significant challenge for the coalition government. However, the administration remains hopeful for a timely resolution.

In a last-minute development, South Africa’s cabinet continued discussions on the 2025 budget just under an hour before its presentation in parliament. This session follows an earlier postponement due to disagreements within the coalition government related to a proposed increase in value-added tax (VAT) by 2 percentage points to 17%. The Democratic Alliance (DA), a key player in the government coalition, opposed the VAT hike, resulting in a deadlock unprecedented since the end of apartheid.

The spokesperson for President Cyril Ramaphosa expressed a cautious optimism regarding the resolution of outstanding issues, stating confidence that the budget would proceed as planned. “A careful balance has been struck and all the necessary compromises have been made on issues related to the budget,” remarked spokesperson Vincent Magwenya, urging the DA to support the revised budget. Despite this optimism, reports indicated that less than an hour prior to the budget speech, the DA had yet to finalize its support for the modified budget proposal.

In summary, South Africa faces significant challenges as its coalition government struggles to find a consensus on the 2025 budget, particularly regarding the contentious VAT hike. President Ramaphosa’s administration remains hopeful for a resolution, although the lack of agreement from the DA casts uncertainty on the budget’s adoption. This situation underscores the complexities of coalition governance in a diverse political landscape.

Original Source: www.marketscreener.com