South Africa’s national budget has been delayed after the two main parties in the ruling coalition clashed over a proposed increase in value-added tax (VAT). The budget delay, which has sent the rand and government bonds tumbling, was announced by National Assembly Speaker Thoko Didiza, who confirmed that the budget speech will now be held on March 12.
For the first time since apartheid, the African National Congress (ANC) no longer has a parliamentary majority and is relying on coalition support to pass the budget. The coalition’s main partner, the Democratic Alliance (DA), has opposed a proposed 2 percentage point VAT increase aimed at addressing the revenue shortfall.
Political analysts have raised concerns about the coalition’s ability to manage major disagreements, highlighting the uncertainty caused by the delay. The VAT increase was intended to support social and education spending, but has faced strong opposition from various political parties and unions, citing the potential to disproportionately affect the poor.
Finance Minister Enoch Godongwana said there would be further discussions on the budget. The delay also comes amid external pressure, including US President Donald Trump’s suspension of aid over South Africa’s land reform policy.