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South Africa’s budget impasse teeters on the edge of an already fractured GNU

22 April 2025 | Story Terrance Molobela | Photo Supplied

Opinion article by Terrance Molobela, Lecturer in the Department of Public Administration and Management, University of the Free State.

Despite fierce opposition of the already passed National Fiscal Framework, the African National Congress (ANC) convened several meetings within and outside the Government of National Unity (GNU) mostly pioneered by its Secretary-General Fikile Mbalula who recently stated: “We are not trickers; we do not trick people. We engaged with ActionSA, and they said they do not want VAT; that’s not tricking anyone.”

One thing is clear, there is nothing binding on the GNU that after receiving additional budget proposals to raise revenue from ActionSA and Building One South Africa (BOSA), the VAT hike will be dropped. In fact, on 16 April 2025 in an interview with Newzroom Afrika the Minister of Finance Enoch Godongwana said: “I am not married to any increase or percentages”. The minister pointed out that the initial budget without VAT hikes was still on the table, however, he further highlighted that VAT increases remain Parliamentary policy issues. His advice is: “If you remove the 0.5% VAT increase, you must find an equivalent amount on the expenditure side to ensure the fiscal framework remains balanced.”

As the budget impasse stands, people need to understand that once the budget is passed by Parliament, the minister cannot unilaterally reverse the VAT increase. This is cemented by Section 12 of the Public Finance Management Act and Section 7(4) of the VAT Act. This ball is in Parliament’s court to reverse the budget and revenue proposal once alternative revenue generation proposal have been brought forward.

With 1 May 2025 looming, South Africans have a bitter pill to swallow as they will be charged R15.50% for every R100 spent. The media covered the VAT increase with rage and concerns from various communities across the country. The people feel punished by the GNU, while facing deep-rooted socio-economic problems like inequality, high unemployment, and poverty.

Despite the GNU deadlock and its fiscal crisis, several members within the ANC have unanimously admitted that the party has grossly failed to reach an amicable consensus within the GNU to freely support the VAT hike, hence it is vehemently opposed from all sides. Some critics suggest that the ANC-led government is poised to drop the VAT hike, but it’s unclear as to where and how the minister of finance would find the money to plug the fiscal gap.

Marriage may be sweet, but divorce is bitter

Both the ANC and DA knew ahead of time that forming the GNU with other parties was what is commonly known as “a marriage of inconvenience”. Before and on the wedding day, you both blind yourselves because of the sweet cake, joy, guests, and presents that long-lost friends will bring along. You create this beautiful picture that only exists in your head and hope that the other party shares a similar picture. But after you have entered the marriage, you then realise that you each functions on different levels and do not have complementary ideologies.

The DA’s ideologies on governance and policy is far the opposite of the ANC, and although it could work, the ANC have demonstrated their thirst for power and control, hence, their ability to share power equally remains a foreign language. DA leader John Steenhuisen has made it clear that they will not sacrifice citizens’ votes for a piece of cake but would rather fight and support a budget that caters for economic growth and job creation. This they have demonstrated by challenging the legality of the budget process in court, with hopes of blocking the implementation of a VAT increase, which has led to widening the rift within the fragile GNU.

The authenticity of the parliament – flawed budget process?

Amid mounting tensions created by the budget impasse, the National Assembly narrowly facilitated the national budget process, the DA, Economic Freedom Fighters (EFF), and uMkhonto weSizwe (MK) party rejected the budget, whilst the ANC-led government through coalescing outside GNU with parties like Action SA, secured majority support for the approval of the fiscal framework.

Parliament passed the 2025 National Fiscal Framework without the formal amendment of the mounting VAT and tax hikes. This was approved without binding recommendations, although budget committees suggested that the VAT and tax hikes be reconsidered at a later stage. As 1 May 2025 approaches for the VAT hike to kick in, reversing the VAT increase would be a lengthy process because it appears untenable.

The DA leader raised concerns that the Finance Committee acted ultra vires of the standing rules of Parliament, meaning the budget was not properly presented to the committee to reject or approve it, and that only a single proposal from the ANC was prioritised, whilst neglecting the DA proposal. This legal anomaly occurred under the watch of the National Assembly on the 2 April 2025. Hence, the DA have been challenging the budget.

One would ponder – “if the tables were turned, and the DA was in the position of the ANC and visa-versa, would the National Assembly opted to approve the budget framework?” I guess we would never know.

Where does the road lead now?

GNU: the ANC has already held several talks and meetings indirectly citing that the DA should hand over their divorce papers. But the president of the ANC needs the DA to remain in the coalition because of further economic shocks, which saw R1 trillion wiped out on the Johannesburg Stock Exchange (JSE). Investor confidence in the economy has hit rock-bottom, and the current trade wars have put pressure on multiple businesses to tighten their investment belts until it is safe to continue investing. The DA has not yet declared whether they want a divorce, but critics suggest that the Deputy President, Paul Mashatile, would be delighted if the DA left since they rejected the very same budget that they expect to reap from. As for ActionSA, it is unclear whether they have decided to join the GNU, but its leader Herman Mashaba has shown interest in joining the GNU, which most critics have weighed as a betrayal to the people of South Africa.

Ordinary citizens: It is time for South Africa’s citizens to brace themselves for the oncoming VAT hike. As much as the minister of finance has argued that it was necessary to stretch the already deeply embedded financial distress of citizens grappling with over-taxation of income, the bitter pill remains theirs to swallow. The 0.5% in VAT carries an underestimated distress for households who will be left alone to deal with increased prices of goods, services, and essentials.

What should be done thus far?

More tax on the people, goods and services kills jobs, which results in reducing revenue generation by government. To avoid further inflationary hikes, the government needs to approach the problem in an unusual way – this means placing strict rules and regulations on any government transaction that takes effect, deal with corruption and mismanagement at every sphere of government. Monies lost and stolen through unfinished projects should be recovered and ensuring that all state projects remain frequently monitored.

The government needs to change its ways of approaching industries, companies, and businesses to create jobs, and transfer some of their skills to the people of South Africa. The youth is yearning to be seen, supported, trained, and placed into the real world to unleash their potential, which might be something the economy needs to re-establish and position itself in the right direction to stir desired economic growth.

News Archive

UFS awards degrees at autumn graduation ceremony

2009-04-28

The University of the Free State’s (UFS) autumn diploma and graduation ceremony took place this week in the Arena on the South Campus in Bloemfontein (formerly known as the Vista Campus). This arrangement has been made because of the large-scale renovations to the Callie Human Centre on the Main Campus.

Friday, 24 April 2009
Faculties of Health Sciences, Law and Theology Diploma ceremony

Law student’s achievement excels 80%
Four Law students obtained the LLB degree at this year’s autumn graduation ceremony of the University of the Free State (UFS) summa cum laude and were awarded the Moritz Bobbert Medal. They are from the left: Lezelle Olivier (80%), Albert Nell (91%) and Amanda du Toit (83%). LiFeng Chien were absent during the photo.

UFS awards degrees at autumn graduation ceremony
Today 331 students and five doctorates in the Faculties of Health Sciences, Law and Theology received their qualifications at this year’s autumn graduation ceremony of the University of the Free State (UFS). Michael Molahloe (left) and Mamokete Ntholeng both received their LL.B. degrees in the Faculty of Law.
Photo: Leonie Bolleurs

This year’s autumn graduation ceremony of the University of the Free State (UFS) was held on the South Campus. From the group of students that received their qualification from the Faculty of Law, is from the left: Janine Jonson, Anneska van der Spoel, Andrea Coetzer, and Jo-Mari Visser.
Photo: Leonie Bolleurs

Students in Nursing receive their degree
A group of students from the Faculty of Health Sciences received their B.Soc.Sc. degree at this year’s autumn graduation ceremony of the University of the Free State (UFS). At the occasion were, from the left: Ruth Beukes, Basetsana Panana, and Dipontsheng Tsolo.
Photo: Leonie Bolleurs

UFS Faculty of Health Sciences awards degrees
Liezl Swanepoel (left) and Heide van der Merwe received their BSocSC degrees at the University of the Free State’s (UFS) autumn graduation ceremony.
Photo: Leonie Bolleurs

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Thursday, 23 April 2009
Faculty of Natural and Agricultural Sciences & Chancellor’s Dinner

UFS awards unique doctorate
Dr Rodney Douglas, who had never obtained any formal undergraduate qualification, this week received a Ph.D. in Geography and Geology during the autumn graduation ceremony of the University of the Free State (UFS). The name of his thesis is “A new perspective on the geohydrological and surface processes controlling the depositional environment at the Florisbad archaeozoological site”. He had four papers published in journals that were related to his thesis. He obtained his South African Museums Association Diploma in Biology in 1988 and his M.Sc. in Environmental Biology at the University of Natal, Durban in 1992. He was accepted as a Master's degree student at that university based on research that he had conducted on, amongst others, the diets of reptiles. He has been working at the Department of Herpetology at the National Museum, Bloemfontein since 1984, where he holds the post of Principal Museum Scientist and Head of Department.
Photo: Leonie Bolleurs

Chancellor’s Dinner: UFS honours doctoral students
Last night, the University of the Free State (UFS) honoured students who had received their Ph.D. degrees at the autumn graduation ceremony this past week, at the Chancellor’s Dinner. A total of 25 doctorates were awarded during the respective ceremonies. Attending the occasion were, from the left: Dr Annemarie Kühn, Ph.D. in Chemistry, Prof. Jeanet Conradie, Department of Chemistry at the UFS and Dr Kühn’s promoter, Prof. Teuns Verschoor, Acting Rector of the UFS, Prof. Corene de Wet, Department of Comparative Education and Education Management at the UFS, and Dr Mafu Rakometsi, Chief Executive Officer of Umalusi and former head of the Free State Department of Education who received a Ph.D. in History. Prof. De Wet is Dr Rakometsi's co-promoter and the late Prof. Leo Barnard, former Head of the Department of History at the UFS, who passed away at the beginning of April 2009, was his promoter.
Photo: Leonie Bolleurs

Mrs Annemarie Kilian, Mr Willem Kilian (BSc. Hons) and Prof Stephanus Kilian
Photo: Mangaliso Radebe

Mr Jaco van der Merwe, Mr Renico Pretorius and Mr Rion Terblanche (all BSc. Quantity Survying)
Photo: Mangaliso Radebe

Ms Mamakoanyane Amelia Shata (BSc. Genetics and BSc. Hons. Plant Molecular Biology) and Mrs Maente Adelinah Shata.
Photo: Mangaliso Radebe

Mr Maurice Ambrose and Mr Owen Monk (both BSc. Quantity Survying).
Photo: Mangaliso Radebe

Ms Tobeka Mehlomekhulu (Lecturer: Department of Geography), Mr Neo Mokgosi (BSc. Hons. Genetics) and Ms Nwabisa Mehlomekhulu (BSc. Hons. Food Science).
Photo: Mangaliso Radebe

Mr John Mdane, Mr Fana Mdane (BSc. Information Technology) and Mrs Agnes Mdane
Photo: Mangaliso Radebe

Mr Kevin Vermaak (BSc. Hons. Geohydrology) and Ms Michelle Steenkamp (BSc. Hons. Geology).
Photo: Mangaliso Radebe

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21 April 2009
Faculty of Economic and Management Sciences

Prof. Magda Fourie's daughter graduates
Nadia Fourie, daughter of Prof. Magda Fourie, former Vice-Rector: Academic Planning at the UFS and now Vice-Rector: Teaching at Stellenbosch University, received the B.Com. Law degree.
Photo: Lacea Loader

724 degrees were awarded during the ceremony of the Faculty of Economic and Management Sciences. Here are, from the left: Simon Serutla, B.Com. Accounting, Lourencia Hamuaka, B.Com. Honours in Financial Economics and Investment Management, Sunet Opperman, B. Accounting, and Yolandi Greyling, B. Accounting.
Photo: Lacea Loader

Students in the Faculty of Economic and Management Sciences graduated this week during the University of the Free State's (UFS) autumn graduation ceremony. Altogether 724 degrees were conferred. Here are, from the left: Marie-Louise Lombard, B.Com. Law, Adriaan van der Merwe, B.Com. Law and member of the Student Representative Council (Legal and Constitutional Affairs), Basanio Ncike, B.Com. Economics, and Richard Schooling, B.Com. Banking.
Photo: Lacea Loader

Center for Accounting honours top achievers
The Centre for Accounting at the University of the Free State (UFS) honoured the top ten students in the third-year B.Com. and B.Com. Hons. programmes respectively during this week's autumn graduation ceremony. Here are, from the left: Prof. Ronell Britz, Chairperson of the centre, Nils Kotze, first place in the B.Com. third-year group, and Madri Victor, first place in the B.Com. Hons. group; back: Prof. Hentie van Wyk, Programme Director: Accountant Training.
Photo: Stephen Collett

Accounting firms in Free State help with recognition of top achievers
Accounting firms in the Free State have contributed to a fund at the University of the Free State’s (UFS) Centre for Accounting to give recognition to top achievers in the third-year programme for the B.Com. and B.Com Hons. degrees respectively this week. It is evidence of the good relationship that exists between the Centre and the South African Institute for Chartered Accountants (SAICA), Free State. Here, from the left, are: Mr Pieter Clase, CoetzeeSmit Chartered Accountants, Mr Oswald Wentworth, KPMG, Mr Ettienne van Niekerk, PricewaterhouseCoopers, Herman Leach, Gobodo Inc. Chartered Accountants, and Mr Stefan Strydom, Havenga, Rossouw & Viljoen; front: Mr Ian Smit, Enslins Bloemfontein, Ms Thelma Crossman, Mazars, and Ms Daphline O'Brien, Ernst & Young.
Photo: Stephen Collett

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20 April 2009
Faculty of Education, Faculty of the Humanities.

CHESD awards 15 masters degrees
A group of 15 students received the Structured M.A. (Higher Education Studies) of the Centre for Higher Education Studies and Development (CHESD) at this year’s autumn graduation ceremony of the University of the Free State (UFS). This is the biggest group in the centre's history to be awarded master’s degrees, while four of the students received distinctions. Also of interest is that six of the 15 students already have doctoral degrees. At the occasion were, from the left: Dr Dipane Hlalele, Qwaqwa Campus, Ms Liesl Hoare, Central Univeristy of Technology, Welkom Campus (best achiever), and Dr Fanus van Tonder, Programme Director: Higher Education Studies and Research, CHESD. Ms Hoare received the Deans medal in the Faculty of the Humanities as the best master’s graduate student at the graduation ceremony. At the faculty’s prize function she also received the Kovsie-Alumni Trust award as the best M.A student in the faculty. She also received the CHESD Prize for the best achievement in the Structured M.A. (Higher Education Studies).
Photo: Leonie Bolleurs

UFS awards degrees at autumn graduation ceremony
Five hundred and eighty six degrees and nine doctorates were awarded this week during this year's autumn graduation ceremony on the South Campus of the University of the Free State (UFS) to students in the Faculty of the Humanities. At the occasion were, from the left: Nicola Bekker, Madré van der Merwe and Esté Scholtz. All three the ladies received the qualification B.A. Language Practice.
Photo: Lacea Loader

This year’s autumn graduation ceremony of the University of the Free State (UFS) is held on the South Campus in Bloemfontein. Today a group of students from the Programme: Governance and Political Transformation in the Faculty of the Humanities received their qualification. From the left, front are: Dr Tania Coetzee, Head of the Programme: Governance and Political Transformation, and Mr Itumeleng Liba, Chief Operation Officer at CENTLEC; back: Mr Kennett Sinclair, Vice-Chairperson of COPE in the Northern Cape, Ms Nicole Joannou, Goldfields Business and Catering, and Mr Tembeni Lobe from Bloemfontein.
Photo: Lacea Loader

Some of the students who received their qualifications during this week's graduation ceremony of the Faculty of the Humanities were, from the left: Shu-Jung Chan, B.Mus. Hons., Brian Gxavu, B.Mus., and Mpolokeng Lepote, B.A. Media Studies.
Photo: Lacea Loader

UFS’s CHESD awards doctoral degree
Ms Mardi Delport (middle), Assistant Director: Media and Communications at the Central University of Technology received her Doctoral degree at this year’s autumn graduation ceremony of the University of the Free State (UFS). The title of her thesis is: “An internal communication model for the Central University of Technology, Free State as a multi-campus institution”. With her are her promoter Prof. Driekie Hay (left), Vice-Rector: Academic Planning, and her co-promoter, Prof. Annette Wilkinson (right) from the Centre for Higher Education Studies and Development (CHESD) at the UFS.
Photo: Leonie Bolleurs

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